Argentine supermarkets, including local units of Wal-Mart Stores Inc., Carrefour SA and Cencosud SA agreed to freeze prices for 60 days amid inflation that accelerated last year to the highest in the hemisphere.
The United Supermarkets Association agreed to keep prices unchanged in their stores until April 1 during a meeting today with Interior Trade Secretary Guillermo Moreno in Buenos Aires, according to a statement from the Argentine Chamber of Commerce.
President Cristina Fernandez de Kirchner has defended her government’s official data that shows consumer prices rose 10.8 percent last year compared with private estimates of 25.6 percent. The government’s alleged underreporting of inflation, which began under Fernandez’s predecessor and husband, Nestor Kirchner, prompted the International Monetary Fund to censure the South American nation on Feb. 1 for the first time in the Washington-based organization’s history.
“They’re trying to hold down inflation, but we’ll see what happens once the agreement ends,” said Susana Andrada, director of Buenos Aires-based consumer watchdog Center for Consumer Education in a telephone interview. “They may be able to control prices of 300 goods, but then we may face some shortages as retailers keep goods off the shelves.”
Fernandez has used price freezes as recently as two years ago to try to keep prices stable, a policy that hasn’t worked and that led to some shortages in the past, according to Andrada. Argentines see prices rising 30 percent over the next 12 months, according to a poll released Jan. 16 by Torcuato Di Tella University.
While the IMF’s censuring of Argentina won’t have an immediate effect, it takes the country a step closer to sanctions that include expulsion. In response to the censure, Argentina said that a nationwide inflation index will be unveiled in the fourth quarter of this year.
Opposition lawmakers, who began to release private estimates to protect economists from fines for calculating their own indexes in May 2011, are scheduled to release January’s inflation on Feb. 14.
Andrada said that consumers foresee higher prices given the drop of the peso in the parallel market where Argentines turn to purchase foreign currency when they can’t get approval to buy dollars at the official rate.
While the official rate for the peso fell 13 percent in the past 12 months to 4.9818 per dollar, the currency in the blue chip-swap, an operation used to buy and swap assets traded in Argentine pesos and U.S. dollars, has weakened 40 percent to 7.8043 per dollar, according to data compiled by Bloomberg.