World Bulletin / News Desk
Argentina’s government has threatened to fine and close down those retailers who excessively hike up prices, after an 18% plunge in the peso against the dollar last week.
“We want consumers to have a fair price, and not abuse,” Presidential Chief of Staff Jorge Capitanich said in a televised news conference on Tuesday.
To make sure this happens, he said that the government has “multiple tools” at its disposal, including the possibility of fining companies for abusive price hikes, and “in extreme cases” closing down businesses.
This has left consumers concerned about a quicker rate of inflation, while manufacturers and retailers feel uncertain about how to price their products.
The depreciation has driven up the cost of imported goods and services in peso terms, such as equipment and parts, as well as overseas consulting.
However, Capitanich turned to blame "greedy executives", who he believes are raising prices “just in case”.
The government earlier this month launched an agreement with supermarkets and suppliers to stabilize prices on 100 staple products throughout 2014.
The depreciation of the peso however, has raised questions about whether this will be possible, and some economists are warning that inflation could surpass 30% this year after hovering between 20% and 25% since 2010.
Economists believe that the deeper problem lies with heavy public spending and monetary expansion, which is flooding the market with pesos and driving up demand.
With the peso losing its value rapidly and interest rates at an all-time low, Argentines are saving as little as possible in pesos and are instead, buying cars and electronics. In turn, this is pushing up prices and tightening supplies. Car sales, for example, rose 16% in 2013, compared with 2012, led by higher-end vehicles, according to the Argentine Automakers AssociationLast Mod: 29 Ocak 2014, 11:12