Monday, July 22, 2024

ARGENTINA | 31-08-2023 16:36

Argentina's government freezes transport fares to combat inflation

Argentina's government freezes bus and train fares in the Buenos Aires metropolitan area.

Argentina's government has announced it is freezing bus and train fares in the Buenos Aires metropolitan area in a bid to soften the impact of runaway inflation exceeding 110 percent per annum.

The announcement, delivered on the eve of the formal beginning of campaigning for the October 22 general elections, comes hot on the heels of a series of other measures designed to plump up pockets.

Last weekend, Economy Minister Sergio Massa unveiled a host of measures, including tax measures and bonus payments for public and private workers and pensioners.

Massa is standing as the ruling Unión por la Patria’s presidential candidate in the upcoming presidential ballot but failed to perform well in the recent PASO primaries. He is looking to boost his base in the lead-up to voting day.

According to a government decree, bus and train fares in the Buenos Aires metropolitan area will be frozen at their current prices. At present, it costs up to 72 pesos to take a bus and 53 pesos per train ride (approximately US$0.20 and US$0.15 respectively, at the official exchange rate). 

In another DNU, the government confirmed its previously trailed news that both state and private workers should receive a one-time bonus of 60,000 pesos (US$165) in two instalments this month and next. 

Chambers of commerce and a number of different provincial governments have pushed back on the order, arguing they will not be able to foot the bill. 

Argentina devalued the peso, its national currency, by around 20 percent against the dollar the day after the August 13 primaries, which were won by outsider libertarian hopeful Javier Milei. The outspoken economist, who says he wants to dollarise the economy, defeated the cumulative tallies of candidates for the opposition Juntos por el Cambio alliance and ruling party coalition.

Earlier this week, Massa also postponed increases for fuel and private health insurance, which had been previously agreed with the private sector, until November. 

The devaluation of the peso, demanded by the International Monetary Fund within a credit agreement to the tune of US$44 billion negotiated in 2021, will boost inflation even further. Analysts expect it to reach two digits in August, following a monthly 6.3 percent in July. 



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