Argentina pledges to prevent price controls leading to shortages

Argentina’s government pledged that a new system of price controls introduced today won’t lead to the shortages that have crippled other countries’ attempts to enforce cost-cuts for consumers.

The government will use computer software to monitor prices on 194 products in the Greater Buenos Aires area, Commerce Secretary Augusto Costa said today in a press conference. The “voluntary” agreement comprises 10 supermarket chains and 65 suppliers and will incorporate other regions of the country during January, Costa said.

The accord follows a similar agreement in June when the government froze the price of 500 goods on supermarket shelves in a bid to rein in the region’s second-fastest inflation. Government and consumer vigilance along with fines and the threat of closure will stop supermarkets from reducing stocks and creating shortages, Costa said. About 1 in 5 products can’t be found on supermarket shelves in Venezuela where more than 100 products are price controlled.

“The prices we are agreeing today are viable prices -- they’re reasonable from the point of view of production, distribution and commercialization,” Costa said. “They’re prices that will guarantee adequate supply but that won’t allow for disproportionate and unjustifiable costs that we’ve detected in certain cases.”

The government today presented a website, precioscuidados.com, where Argentines can check prices of products in the accord.

Venezuelan Shortages

Venezuela has suffered from shortages of goods ranging from toilet paper to butter and cooking oil, while inflation accelerated to 56.2% in 2013.

Annual inflation in Argentina quickened to 26.8% in November, according to a monthly survey of economists published by opposition lawmakers. That’s the fastest pace since lawmakers began distributing the report in May 2011 to protect the identity of the analysts who were fined by the government for reporting data that differed from official figures. Inflation was 10.5% in the same period, according to the government.

At least eight people died during looting incidents across the country in December sparked by police strikes demanding higher wages to cope with the surging cost of living.

www.bloomberg.com

Copyright 2014 Bloomberg. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

Comments
comments powered by Disqus
Check out Futures Magazine - Polls on LockerDome on LockerDome