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ECONOMY | 17-04-2019 12:36

Macri freezes food prices in move to appease voters

Government to halt price increases on at least 60 products and freeze utility costs until end of October.

Argentina’s government froze prices on an array of items Wednesday in an attempt to ease the impact of a recession and austerity measures ahead of October’s presidential election.

The government will halt price increases on 60 food products at least until the end of October, while holding gas, electricity and public transportation costs unchanged, according to a document published on the presidential website. Officials also reached agreements with mobile service operators to fix prices for the next five months.

"We remain convinced that to lower inflation in the long term – and end this problem we’ve had for 75 years – profound changes are indispensable," the document reads. "In the short term, however, we’re taking measures that protect Argentines in this transition stage."

The measures come a day after the government reported that inflation reached almost 55 percent in March on the year, and 4.7 percent in the month.

Part of the reason behind persistent inflation is the government’s reduction in subsidies on transportation and electricity, which it must do to comply with targets in a US$56-billion agreement with the International Monetary Fund. Food and clothing prices have also increased sharply in recent months.

President Mauricio Macri, who faces re-election on October 27, has seen his approval ratings fall to the lowest of his tenure.

The government also said today that it would provide more loans to pensioners and discounts at supermarkets in an effort to boost an economic rebound. Argentine ministers, including Economy Minister Nicolas Dujovne, were previously scheduled to speak at 11.30am local time to explain the measures.

by by Patrick Gillespie, Bloomberg

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