In the wake of apparent successes in curbing inflation under President Javier’s administration in Argentina, recent reports have revealed concerning trends in economic activity and welfare. To combat rising retail prices, the Libertarian Government has authorized imports of essential goods such as yerba mate, dairy products, meat, rice, and sugar.
The Chamber of Industry and Commerce of Meat and Meat Products of the Argentine Republic (Ciccra) reported a significant decline in beef consumption, down by 9.3% year-on-year last month, from 49.2 kilos per year to 44.6 kilos per inhabitant. This trend continued into the first two months of 2024, with beef consumption contracting by 8.2% year-on-year.
Miguel Schiariti, head of Ciccra, attributed this decline partly to the surge in consumption witnessed in the early months of the previous year, driven by stable meat prices. However, he anticipates that the impact of current conditions may become more pronounced after March. Despite this, Schiariti does not foresee an imminent crisis in cattle availability or a sharp spike in prices.
Additionally, the relatively lower price of pork, which rose by only 2.2%, compared to beef’s 4.2% and chicken’s 5.4% increase in February 2024, also contributed to the decline in beef consumption, as reported by the Institute for the Promotion of Argentine Beef (Ipcva).
Compounding these challenges is the fact that the average income of formal workers in Argentina is now below the poverty line due to persistent inflationary pressures. According to the National Institute of Statistics and Census (Indec), the Total Basic Food Basket (CBT) cost AR$ 596,823 in January, while the Secretariat of Labor, Employment, and Social Security reported that the Average Taxable Remuneration of Stable Workers (Ripte) amounted to AR$ 555,269. This indicates that stable formal employees, on average, earn incomes below the poverty line, prompting nearly three million individuals with formal employment to seek additional means of financial support.
This represents a notable departure from historical trends, as wages have typically outpaced the CBT. However, this is the first time since Indec resumed measuring the CBT in April 2016 that wages have fallen below this threshold. The gap between wages and the CBT currently stands at 7.48%, with the CBT exceeding wages. Just a year ago, average salaries were sufficient to purchase 1.23 CBTs.
In response to these challenges, President Milei and Economy Minister Luis Toto Caputo have opted to postpone fare increases on public transport and cooking gas in the Buenos Aires Metropolitan Area (AMBA) in an effort to rein in inflation to single-digit figures by March, following February’s 13.2% surge.
