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ECONOMY | 26-10-2021 14:08

AmCham warns government that price controls are 'time bomb'

US companies warn in an emailed statement issued via American Chamber of Commerce in Argentina that “price freezes do not solve the problem" of runaway inflation, rather "they transform it into a time bomb that will explode sooner or later.”

The Buenos Aires-based American Chamber of Commerce in Argentina (Cámara de Comercio de Estados Unidos en Argentina, AmCham) has asked the government to review its decision to impose a 90-day price freeze on more than 1,500 household goods, describing the policy as a “time bomb” that could “explode” at any moment.

Referencing Argentina’s high rate of inflation, AmCham said in an emailed statement that “price freezes do not solve the problem; on the contrary, they transform it into a time bomb that will explode sooner or later.”

The business chamber warned that a sharp correction in prices would take place once the freeze is lifted, describing the Peronist government’s policy as an “artificial recipe" to control inflation.

"The thread is always cut at the thinnest, the victims will once again be the more than 185,000 SMEs (PyMES),” said AmCham.

Like other measures, the government’s new pricing policy "makes it impossible to create new jobs, limits investment and creates a hostile regulatory environment."

So far, the government's discussions with companies about the price freeze "reflects the unwillingness on the part of the authorities to reach a proper and balanced agreement" with firms, said AmCham.

The group instead called for a “stabilisation plan that gives clear signals on monetary and fiscal policy."

 

– TIMES/AFP

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