Milei Dials Back Shock Therapy to Keep Argentina’s Inflation in Check

[Digital Nomad]

I think it's smart to put the brakes on the shock therapy. If not, I doubt people will stay have too much patience.

Milei Dials Back Shock Therapy to Keep Argentina’s Inflation in Check

(Bloomberg) -- President Javier Milei is tapping the brakes on his shock therapy program in a bid to hold on to popular support amid Argentina’s bleak economic reality, even if it means unsettling markets.Most Read from BloombergBiden Vows to Stay in 2024 Race Even as NATO Gaffes Risk His...

finance.yahoo.com

 

[Wally]

Agree on pumping the breaks on increases in some of these expenses. Putting all of these big increases too fast too soon on poor and middle class isn't going to help.

 

[earlyretirement]

I also believe it is wise to slow all of these increases down. Pushing all of these costs on the lower/middle class is too difficult. I understand his logic. He wanted to do as much very quickly as he could but there is only so much patience people will have when they can't eat. Prices do need to go up on public transportation, utilities and many other things but these 300% go 400% increases suddenly aren't the way to do it IMHO. Definitely prices need to go up but there is a delicate balance of how much and when.

Dollarization is one of the things that I have mentioned from before President Milei got elected I said was impossible any time soon. You are seeing that play out today. I mentioned how there just isn't the funds needed to do that.

Slowing down inflation I believe is the #1 task at hand. They have made good progress with that. You can't fix everything at once. And usually trying to fix one thing will affect the other as we are seeing. As the economists in the article mentioned, you can't let the exchange rate depreciate at a rate much lower than inflation for too long because it creates pressure.

The Omnibus was a HUGE start but the markets are now saying, "Now what?!". I pointed out before that the only place in the short term to get new funds needed would be the IMF and that wasn't likely.

Much like many things in Argentina, the right hand doesn't know what the left hand is doing. Caputo on June 28 said that the government would freeze gas and electric prices which contradicted a senior energy official who outlined monthly price hikes were happening. Utility bills have more than doubled during June. I got my utility bills and they have more than doubled.

It's a good idea to slow down some of these increases.

 

[Vero]

People are going to turn against Milei if everything skyrockets. Companies will do whatever they want if you let them. Look at healthcare costs. Crazy the prices now. Same thing with utility companies if you let them. People can't afford that.