Argentina’s next president is to inherit an economy dogged by chronic inflation, but voters have grown so used to it they hardly seem to care.
Spiraling prices have come to be seen as normal in Latin America’s third-largest economy, where annual inflation has stood above 20 percent for the past eight years.
“Sure, living with inflation is a problem and it always will be — otherwise this wouldn’t be Argentina,” said Mercedes Salto, 58, who plans to cast her ballot today for Daniel Scioli, the candidate of the left-wing coalition that has governed Argentina since 2003.
This year’s inflation figure — about 30 percent, analysts forecast — is low compared to the hyperinflation crises of the 1970s and 1980s.
Argentine leaders have a history of printing money to fund populist programs, which has often come back to haunt the country in the form of hyperinflation.
However, Argentines have become inured to spending money as they earn it so its buying power does not shrink.
Credit plans that let shoppers buy products in fixed monthly installments are hugely popular, while parking money in the bank is seen as a loser’s bet.
With a week to go to the vote, which will turn the page on 12 years under Argentine President Cristina Fernandez and her late husband, former Argentine president Nestor Kirchner, inflation barely registers as an election issue.
Annual inflation came in at 23.9 percent last year, according to government figures — though private research institutes put it at around 35 percent.
This year it is forecast at 15.6 percent, according to the government.
The price of bread has soared 300 percent in seven years and Argentina’s world-famous meat is so expensive the country has lost its title as the top beef consuming nation in the world.
High prices are also weighing down the real estate market.
“Apartment sales have been dead for the past three years. But high-priced rentals abound,” real-estate agent Matias Carrera said.
The landlords with the most popular rentals — one-bedroom appartments for between 4,000 and 5,000 Argentine pesos (US$420 and US$526) per month — insist on contracts with automatic rent increases of between 15 and 20 percent every six months, he said.
Seeking to spur big-ticket purchases, Fernandez’s government launched a program eight months out from the elections that lets shoppers buy items in 12 monthly installments, interest-free.
SALARY INCREASES
The state also mandates regular salary increases for every sector to keep pace with inflation.
The administration “has promoted consumption-friendly policies, increases in pension payments, mandated pay raises and subsidies that have contributed to creating an atmosphere of well-being that wins votes for the ruling coalition,” said Juan Pablo Paladini, head of research at consulting firm Escoletina.
Analysts predict that whichever candidate wins is likely to have to undertake reforms to boost investment and rein in a deficit that stands at 6 percent of GDP.
The government forecasts economic growth of 3 percent next year, although the IMF is predicting a 0.7 percent contraction.
The two top candidates have promised economic reforms, although Scioli wants them to be small and gradual, while Buenos Aires Mayor Maurico Macri wants them to be sweeping.
Whoever wins at the polls, inflation looks set to get worse next year.
Whoever wins the presidency “is going to have a short honeymoon,” said Juan Germano, head of consulting firm Isomania.
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