Argentina sets grocery price controls, freezes fuel prices to tame inflation
Business
South American nation is battling against skyrocketing inflation which topped 113.4pc through July
BUENOS AIRES (Reuters) – Argentina's government announced on Friday a price agreement for supermarkets to limit monthly increases to a maximum of 5 per cent for 90 days as the country tries to tamp down triple-digit inflation as a high-stakes election looms.
Economy Minister Sergio Massa made the announcement after a meeting with supermarket representatives, noting that officials reached the deal with representatives of 31 local supermarket chains to "stabilize" prices until national elections scheduled for October.
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Massa himself is running for president as the standard-bearer of the ruling Peronist coalition, after he won its nomination in last Sunday's primary vote.
The center-left minister will face off against radical libertarian Javier Milei, the top vote getter in the nationwide primary, and center-right hopeful Patricia Bullrich.
The agreement takes into account tax benefits for those supermarkets that do not increase prices above 5pc per month, besides a credit programme for small and medium-sized companies that supply supermarkets, the ministry said in a statement.
The move follows other price-freezing initiatives from the government to contain surging annual inflation, which topped 113pc in July. Consumer prices are expected to rise further in August after Milei's shock primary win led to a sharp peso devaluation.
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"The objective of this deal is to prevent the variation in the official exchange rate – which responds to an (International Monetary Fund) condition – from being transferred to the prices of mass consumption products, negatively impacting the pocket books of all Argentines," the statement added.
FUEL PRICES
Earlier, Argentina's economy ministry said on Thursday it will freeze fuel prices until October 31 after an agreement with the industry.
In a statement, the ministry said the government will cut taxes in exchange for the price freezes, but added that the tax benefits can be "taken away" if companies violate the agreement.
The agreement followed a meeting between economy minister Sergio Massa and executives from oil companies such as YPF and Vista earlier in the afternoon.
