What is the true situation in Argentina? The one that has an inflation that dropped by half or the one that presents a number that must be looked at with a double lens because of how it was measured and under the conditions that it was measured? Is it the country that is on the verge of agreeing with creditors or the one that is about to default? Is the dollar price the official or blue?
But to the daily inconveniences of the own situation of the economy of Argentina is added a world that does not collaborate. Brazil, the main trading partner, announced that it projects a 4.7% drop in its Gross Domestic Product (GDP). This situation did not go unnoticed by companies with strong ties to the neighboring country. It is that due to the critical situation that is lived for these hours as a result of the coronavirus pandemic, the fall of Brazil is more than worrisome for some sectors. The automotive is a case. In April it was the first month since cars were manufactured in Argentina, that no 0 km left a production line. But if the impediment to work was a problem, now the lower demand in Brazil will add to the main market for assembled cars in the country. The automotive is a case, but it is not the only one.
On another plane, no less worrying, is inflation. Logic indicates that the issuance that the Government had to make to assist companies, employees and workers in vulnerable situations does not correspond to inflation that was precipitated. One of the mitigating factors is that several of the measurable items were stopped. Examples are tourism and recreation. Another mitigation is how what had to be measured was measured. In this last point is where the Indec had the greatest drawbacks since it is clear that April was perhaps, together with December 2001, the month in which any measurement attempt was a kind of approximation in which it was necessary to have so many items note that you have to take the result with tweezers. And here it is not a liar Indec. It is a very special month to measure.
Taking all considerations into account, food prices rose 3.2% last month and more than doubled the general level of inflation, which stood at 1.5%. At the same time, the largest increases in this item were led by products such as oranges, with 57.2%, and onion, with a rise of 31.6%. On the other hand, meat and dairy products also increased well above the average price set by inflation.
Various issues are viewed with great concern in the Government. Inflation is one of them and that is why there is also concern about the escape of financial dollars (counted with liquidation and MEP) that are much closer to blue than official ones. In the middle of all this panorama, Argentina negotiates with the creditors, an issue that is far from being minor, but it seems.