2024-03-16 02:00:00
Reality sets limits. In democracy you can’t do anything. Institutions set limits. The IMF and the governors ask for consensus that is not marketing acts. While the Government explains the successes of its economic plan and discusses inflation indicators. We are used to this.
Governments love to believe their assumptions and create stories. They like to find extravagant explanations as to why scientific indicators do not match what they believe is happening. Now the problem would be 2×1.
Indec has been beaten by Economy Ministers many times. Methodologies are discussed, their ways of controlling the evolution of prices are doubted. But not only officials discuss the indicators, consumers do too. Each of them has their own meter on their head. And it usually does not coincide with official indicators either.
Approximately 15 years ago I built an inflation perception index. I was not trying to compete with Indec, my intention was to know how consumers perceived the behavior of prices in general, and in the different items of the consumer basket in particular. The experience was very interesting because if we asked regarding percentages, the differences we found with the Indec data were important, but if we asked regarding intensities of increases, in general, there was a coincidence regarding the items that had increased or decreased the most in the month.
I learned that public perception cannot think of price increases in percentages. And he can’t think regarding them, because the unit of measurement he has in his head is zero, ten and one hundred.
Today Indec is telling us that accumulated inflation in the last twelve months was 276%. If we ask a consumer who is distressed because they cannot make ends meet, how much prices increased in the last year, they will surely answer a number between 80% and 100%. But conversely, if one month’s inflation had been 4%, it is most likely that he would answer us nothing or 10%.
The consumer, rather than thinking in percentages, thinks in intensities. Put into categories: a lot, a lot, a little, nothing. It’s what they live. It is not strange then, that in a situation where the real salary has been losing heavily once morest the increase in prices, which to the Government seems like a spectacular number, the consumer who suffered daily increases in public transportation, gasoline, food, is exhausted. and what happened to prices in February seems terrible to you. Not to mention that it is already experiencing the increases of March. For those who go shopping, every increase is too much, because the money is not enough. The discussion regarding 2×1 is irrelevant.
A game to which the 30% of us who buy in large chains are exposed, while there is 70% who buy in local stores with always more expensive prices, more than in large chains. At the same time, how many of us who go to the supermarket buy two containers? Good question for officials to answer. There the Indec knows how to behave.
The discussion is very similar to what happened in the days of programs like Fair Prices and similar. The vast majority did not access these products, because they were not at their place of purchase, regardless of whether there were shortages in the supermarket.
The problem today is a combo of recession, increasing poverty and the beginning of layoffs. With statistical maneuvers, social discontent is not going to decrease. This will only happen when demand expands and there is a perception of making ends meet comfortably.
The great advantage of the Government is that it still manages to blame the previous one, and the political and business class for the situation suffered by a large part of Argentines.
As we know, honeymoons only last six months. Milei promises a basket of currencies and stability for that date. Prior to going through the May Agreement. We will see.
*Consultant and political analyst.
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#problem #inflation #intensity #2×1
