Purchasing Power In Argentina Slumps To The Lowest Level Since 2001

ECONOMY | Yesterday 00:06 Purchasing power loss in Argentina slumps to levels not seen since 2001 crisis Soaring utility bills and basic shopping-basket prices have eroded the capacity of families to buy everyday goods. Minimum wage has fallen 28% in terms of purchasing power over last 12 months, UBA report finds. Share this News A woman looks at the window of a clothing store that reads 'Clearance Last Days' in Buenos Aires on May 14, 2024, on the day of the announcement of April's inflation index. A woman looks at the window of a clothing store that reads 'Clearance Last Days' in Buenos Aires on May 14, 2024, on the day of the announcement of April's inflation index. | JUAN MABROMATA / AFP The purchasing power of families in Argentina has fallen this year to record levels not seen since 2001 economic crisis. Argentina’s minimum wage lost 1.3 percent in October, accumulating a loss of 28 percent over the 12 months between last November and this, according to a report prepared by the Instituto Interdisciplinario de Economía Política at the University of Buenos Aires’ Economics Faculty. It is the steepest annual decline in incomes since the 2001 crisis, said the report. The abrupt fall is explained mostly by increased inflation – currently at an annual 193 percent – with a post-devaluation peak of 25.5 percent last December when President Javier Milei took office. Soaring utility bills also explain the fall in purchasing power. Milei evaluates Argentina’s future in Mercosur Read more... Milei evaluates Argentina’s future in Mercosur The institute’s report – "Panorama of formal wage-earning employment and its remuneration" – shows that wages started to plunge last December when they contracted 15 percent due to accelerating inflation, nosediving yet further in January with a fall of 17 percent. This trend was temporarily interrupted in the following months, a period during which nominal wages accompanied inflation so that additional reductions were not observed. Last June there was a new fall (minus 4.4 percent), followed by a certain recovery in July (plus 4.3 percent) and by consecutive reductions in the following three months. Lula: Brussels, not Paris, will decide EU-Mercosur free-trade deal Read more... Lula: Brussels, not Paris, will decide EU-Mercosur free-trade deal The downward trend of the previous years, added to the sharp contraction of those months, positioned the minimum wage below the levels registered in 2001, prior to the convertibility crisis, as well as Implying an erosion of almost 60 percent from the highest level in that series in September, 2011. The average wage of the formally employed as surveyed by the INDEC national statistics bureau also registered a sharp contraction between November and December last year. Milei confirms his ‘chainsaw’ will keep running next year Read more... Milei confirms his ‘chainsaw’ will keep running next year However, decelerating inflation, added to the wage negotiations within the framework of collective-bargaining agreements, have prevented the fall in the purchasing power from continuing with a process of recovery beginning afterwards. Last August registered an increase of 0.8 percent with 0.3 percent in September. Despite that, last September (the last available figure) the purchasing power of the average wage continued to be 1.5 percent inferior to last November with the percentage of increase diminishing markedly since August. The panorama of August and September becomes more critical when analysing the data of the average remuneration of registered private- sector wage-earners, as recorded by the SIPA pension system. Betting on Milei, Argentine investors choose longer duration Read more... Betting on Milei, Argentine investors choose longer duration After growing in real terms in June (+four percent) and July (+2.8 percent), a fall of 2.5 percent was experienced in August while in September the preliminary data released by the Labour Department show a new fall of one percent. This implies a loss of purchasing power of three percent below that registered last November while accumulating a fall of 20 percent from the maximum level of the series registered in May, 2013. – TIMES/NA