Economy Minister Sergio Massa‘s team does not show a plan and limits itself to managing the violent rhythm of the Argentine nominal rate.
The Government authorized increases on the main public service tariffs, practically the only tool to contain public expenditure within the agreement with the International Monetary Fund (IMF).
One of the strongest impacts on the cost of living is the increase in electricity tariffs for residential users.
Those people classified in “level 1” will lose the perception of subsidies, and the Government estimates an average increase of between 85% and 90% in electricity bills.
Likewise, an increase of 31% for companies was established, with an additional update projected at 17% as of August.
Gas tariffs are updated with an increase of between 20% and 37%, and the Ente Nacional Regulador del Gas (ENARGAS) confirmed an average increase of 25% for residential users.
Most of the increase will occur within the “distribution” component of the tariff, which may increase between 90% and 100%.
The Government’s provisions will also affect transportation prices and represent another severe blow to the pocket.
Bus and train fares will increase by 7.8% for the Buenos Aires Metropolitan Area (AMBA), bringing the minimum fares to $42.67 and $26.82, respectively.
The situation in AMBA’s public transportation is critical since the companies cannot decide either the fares or the subsidies to be received as compensation; consequently, the quality of the services deteriorates.
Cabs will be updated by 20%, while tolls in the City of Buenos Aires will increase by 40% and up to 50% in the accesses to the Province of Buenos Aires.
Gasoline will have a 4% increase, confirmed by both private companies and YPF.
In addition, after increasing up to 30% monthly in March, the bills of subsidized private schools in the Province of Buenos Aires will increase by 6.7% in May.
A monthly increase of 8% was also authorized for telecommunications services (telephone, cable, and internet).
Private health services will have a monthly update of between 3.43% and 4.76% on prepaid services, depending on whether or not the users meet the requirements to access preferential regulated rates.
Rents will have a dominant weight in the cost of living increase for May, according to the provisions of the law.
An update of 95.94% is foreseen for the May installment, so a person paying $60,000 per month will now pay more than $117,000.
This created a sort of “entry barrier” for new tenants, and systematically discouraged supply from the point of view of landlords.
With information from La Derecha Diario
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