Buenos Aires Times

Economy in brief: inflation, industrial activity and soft-drinks tax

Main economic stories from the last week.

Sunday 19 November, 2017
Coca Cola.
Coca Cola. Foto:Cedoc.

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Inflation in October rose by 1.5 percent, the INDEC national statistics agency announced on Tuesday, bringing the figure for the year so far to 19.4 percent. The news confirms once again that the government is struggling to tackle the figure, despite the rate being considerably lower than most months over the past decade. Later in the day, the Central Bank rose interest rates on its Lebacs to 28.75 percent, a rise of 2.25 percentage points. Economists expect inflation to come in at close to 23 pecent this year, above the Central Bank’s original target for the year of between 12 and 17 percent. Experts also think the rate may rise even further, with further hikes expected in November and December. 


An interesting back-and-forth concerning Coca-Cola flew through the business pages this week after the government’s proposed changes to the taxation of soft drinks were made public. According to reports, the soft drinks giant allegedly told the government and its local distributors that it had placed its proposed investment in Argentina under review amid news of tax on soft drinks jumping to 17 percent. However, those reports were assuaged by a statement by Coca-Cola’s Latin American chief, Alfredo Rivera who said any such review had not been “communicated” by any of the firm’s people. He said its “commitment to the development” of Argentina was not in doubt. 

Industrial activity increased 2.2 percent in September year-on-year, with the accumulated figure for the year reaching 0.7 percent, driven by the production of basic metals, non-metallic minerals and cars, a new CEU report said yesterday. 

Electricity rates will rise across the entire country, as from December 1, as economic subsidies continue to be removed. As a public hearingin the City yesterday, it was revealed that rates will rise in two stages, in December 2017 and February 2018. Next month there will be an average 43-percent increase, followed by an average 24-percent rise in February.



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