Argentina Roundup: Transportation subsidy, salary Index, food prices

Interior transportation subsidy

President Javier Milei defended the removal of national subsidies for transportation in the interior of the country and urged governors to use their resources. He warned that without the necessary tools, the adjustment would worsen and fall in the provinces. Milei suggested that they stop spending on shows and concerts. He also criticized the governor of Córdoba, Martín Llaryora, for demanding 20 billion pesos ($24 million) in subsidies and paying 27 billion pesos ($32.5 million) in official guidelines. “The governor of Córdoba (Martín Llaryora) crying for 20 billion pesos in subsidies and pays 27 billion pesos in official guidelines. Well, let him stop arranging with the media so that they speak well of him and do not criticize him,” he is quoted by local media La Voz.

Salary Index

The National Institute of Statistics and Censuses (INDEC) in Argentina reported an average salary increase of 152.7% in 2023, with annualized inflation at 211.4% throughout 2023. Public salaries rose 148.6%, while private salaries advanced 165.8%, resulting in a 20.2% drop and a 14.7% drop respectively. Non-registered employees saw a 115.3% increase in 2023. In December 2023, salaries fell 11.5% for private employees and 15.9% for public employees while non-registered employees saw a 7.6% increase, local media Ámbito reports.

Food prices soar

Food prices increased 3.4% in the first week of February, driven by dairy, meat, and baked goods. The increase was 2.3 percentage points compared to the previous week. Basic basket products saw an average increase of 13.4% and 10.3% in the last four weeks. Dairy products, oils, baked goods, and meat accounted for almost 90% of the increase, local media Todo Noticias reports.

Dollarizing of economy

President Javier Milei of Argentina has stated that the country is "nothing away" from dollarizing its economy, with a monetary base of $7.5 million and $7 million of reserves. He added that it may take a little longer than 2024 due to financial system reforms. However, he noted that the monetary base is at 87.5% and the government is working on a better balance sheet to reduce inflation rates. He also mentioned that the monetary base in pesos remains the same, but the dollars supporting it are increasingly larger. This is very important because the monetary base in pesos remains the same but the dollars that support it are increasingly larger. This shows how we are cleaning up the balance sheet of the Central Bank and the healthier the balance sheet of the Central Bank is, the level of underlying prices of the economy is lower, therefore the inflation rate decreases," he is quoted by local media Clarín.

Attack on police station

A group of neighbours attacked a police station with gunfire, damaging a patrol car and injuring a police officer on February 9 in Ciudad Evita, a city in Buenos Aires. The attack began after officers tried to identify two occupants in a vehicle with a license number which had been reportedly involved in a kidnapping and robbery case. Police employed non-lethal weapons, anti-riot ammunition, and shotguns to repel the attack, La Voz reported.