Argentina fines retailers for 'abusive, unpatriotic' price hikes

Argentina's government accuses businesses of spurring inflation.

Argentina fines retailers for 'abusive, unpatriotic' price hikes

World Bulletin / News Desk

Argentina’s government has allegedly fined 31 electronic and household appliance retailers for what it calls ‘abusive price hikes,’ as it seeks to contain inflation after an 18% devaluation of the peso last week.

Presidential Chief of Staff Jorge Capitanich declined to name the fined retailers, saying that the Commerce Secretariat would disclose such information when it is “opportune”.

He said that the “speculative conduct by executives and retailers are an embarrassment for their unpatriotic attitude", and that alternatively, “when conditions are different, they do not reduce prices”.

On Tuesday this week, Capitanich warned retailers of potential fines, adding that the government could close down businesses if price hikes were deemed abusive.

Several electronics and household appliance and electronics retailers stopped selling products on Friday after the peso plunged the previous day.

The battle to keep a lid on inflation, which is already running into double digits, comes after an 18% plunge in the peso to 8 per dollar, from 6.8 the previous week.

This has made it harder for retailers to price their products, given that a portion of their costs are imported in dollars.

Capitanich has warned that the government will continue to fine companies for excessive price hikes and shortages, strip them of benefits, like low-interest loans and subsidies, and import products to make up for any shortfalls.

Regardless of the government’s aims, economists warn that inflation could surpass 30% annually this year after hovering between 20% and 25% since 2010.

Economists say a deeper problem is heavy public spending and monetary expansion, which is flooding the market with pesos and driving up demand at a time when interest rates are so low that saving in the local currency leads to losses.

Instead, consumers are buying cars and electronics, and the high demand is tightening supplies and pushing up prices.

Last Mod: 30 Ocak 2014, 10:09
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