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OPINION AND ANALYSIS | 05-04-2022 12:26

Argentina’s ‘war against inflation’ provokes disagreements in ruling coalition

Officials in the ruling Frente de Todos coalition disagree on the best strategy for tackling this crucial battle.

The "war against inflation" proposed by President Alberto Fernández will be difficult to win if the different officials in the ruling coalition’s economic areas do not agree on a strategy to fight it. 

Today there is no agreement and it was Domestic Trade Secretary Roberto Feletti, who last week expressed it as such by saying "I don't do miracles". With the government resigned to the fact that March will once again show a new hike in inflation, the different positions within the government in the face of runaway price increases that they cannot contain have once again been exposed.

Feletti, who arrived to the government in October last year at the request of Vice-President Cristina Fernández de Kirchner, assures that he has few tools when it comes to controlling inflation. Above all, if one looks at other departments, he notes that they are the ones that "have the real tools."

Within the government, they admit that it will be above six points. In the Commerce Secretariat, they believe it is "unfair" and "absurd" that Feletti is being singled out for this figure. The official had left the national administration more than 10 years ago and never thought he would return to control prices. He has always worked in macroeconomic areas, from where he insists that measures must be taken to help contain price rises.

"It is not possible to fight inflation only with a trade secretary who is in charge of the micro economy, and even less so from a trade secretary who does not handle foreign trade as he once did," say sources within Kirchnerism, the sector of the ruling coalition to which Feletti responds.

Feletti's political boss is Fernández de Kirchner, but he knows Alberto Fernández via his historical activism in the City of Buenos Aires and every move he makes is anticipated by the president. He also asks him about his position on price rises. The secretary insists the state must be present, with a strong regulation of imports and an increase in withholdings on exports. “You have an Agriculture minister who says that there is no way that taxes [on the sector] can be touched at a time when the FAO index is at its highest level since it has existed. Food has never been as expensive as it is now and, despite this, the tools to decouple local prices from international prices are quite limited for us," says the sector that answers to the vice-president. It is a message to those who point the finger at Feletti for high inflation figures.

"Inflation is a phenomenon that involves the Central Bank, the Ministries of Economy, Agriculture and Productive Development. If there is no coordination of the entire economic team, from here we can coordinate the micro-economy and establish certain regulations for some elementary baskets on the shelves and in supermarkets, set reference prices in some essential markets, but to think that we can tackle inflation is illogical. We have to fight it from the macro-regulation that involves the actions of all state agencies to have a concrete impact," they said in the Commerce Secretariat, after Feletti admitted that he is not a miracle worker and that the inflation figure for March will be high. 

This level of coordination does not yet exist and perhaps it also depends on a miracle – ruling coalition officials agreeing on how to combat the biggest problem facing the administration of Alberto Fernández.

Rosario Ayerdi

Rosario Ayerdi

Editora de Política de Diario Perfil. Mail: [email protected]

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