The government will seek to renew the Fair Prices program for another 90 days. The Commerce Secretariat will aim to continue with monthly increases of around 5%. The current plan expires on October 31 and negotiations will begin in the next few days with the companies that claim that their costs are higher than that. The Economy Ministry is focused on resetting expectations after the elections.

Sunday’s election results gave Sergio Massa strong support to get through the four weeks until the run-off. This was reflected in different aspects, among them the fact that exports resurfaced. In the first round of the week, the Central Bank was able to collect U$S200 million, its most significant positive balance of the last few months.

Within this scenario, it will look to renew the Fair Prices program in a context where it is also seeking to realign expectations that were distorted after the primaries. The task will be in the hands of Commerce Secretariat head Matías Tombolini, who is generally in charge of discussing this agreement with companies.

The government will seek to extend the current agreement that expires on October 31 for the next 90 days with a 5% monthly increase. The plan covers a large basket of food and beverages, as well as cleaning and personal hygiene products, which are mainly found in large supermarket chains. 

It also applies to other items, such as clothing, footwear, and electrical appliances. A key discussion will be over gas prices. The agreement expires at the end of the month, and although companies have already made raises, they will seek new ones that are unlikely to be approved, at least in the ammount they intend.

The government says that the strategy to lower inflation is to reduce the deficit, increase exports, and accumulate reserves. But they consider the Fair Prices program a tool to guide expectations in a high inflation regime driven by high inertia.

That is why Massa moved fast. He took advantage of the presence of a large group of foreign correspondents and gave a press conference a few hours after winning Sunday’s elections, where he attempted to show himself presidential and outlined a road map of what could be his potential administration after December 10.

He used the opportunity to address the doubts the markets may have in regard to a Peronist victory. He said he would seek a fiscal surplus in 2024, implement actions to improve bond parity, and implement a special exchange regime for exporters. Massa also drew the general outlines of what his foreign policy could look like, aimed at positioning Argentina with a multipolar view of the world.

Originally published in Ámbito