Month to month, so they do not notice (but how is inflation?) – Urgent 24

BUENOS AIRES ( Urgente24 ). The monthly payment of fees allow distributors receive funds more quickly in an inflationary scenario, but also make less noticeable the impact of adjustments in the pocket of consumers , according to agency Argentinas News .

The new regulatory framework for the sector include periodic reviews , as stipulated legislation enacted at the time of privatization, which is expected to be a sharp increase in rates.

The government estimates that bring tariffs to a equilibrium level will require a process of two years and from there will be periodic adjustments to place them at the level of costs closer to international levels.

According to the Ministry of Energy and Mining, is analyzes periodic indexing system that would include the development of local service costs and the evolution of the dollar, for companies to plan their investments.

According to official sources, once they are recomposed revenues of companies to ensure their sustainability, the Government will advance alternative tariff adjustments that include public hearings , in which various actors linked to utilities give their opinion.

The government already ruled indexation mechanism used as the “Producer Price Index (PPI)”, which measures industrial inflation in the United States and was the reference to the adjustments established in ’90.

Today the cost of the residential rate in cents kilowatt hours in Argentina would be around US $ 1.10 to US $ 6.30 subsidy and without subsidy.

Inflation

The issue is urgent but also delicate. The consultant Economics & amp; Regions said days ago:

“(…) should not be forgotten that the K heritage is latent risk of a potential rise in inflation. If inflation accelerates in 2016 it is responsible for monetary policy and Bough Exchange Vanoli, who left a surplus of pesos equivalent to 4% of GDP. In this context and taking into account that K administration made an inflationary floor above 40% per annum, the current government will merit any less close or (inclusive) to 30% annual inflation for 201 6 (…) “.

Also:

” (…) Keep in mind that battle against inflation will not be simple . Beyond the benefits of lifting the stocks, the risk that the nominal rise in the dollar not counterbalanced by an increase in the price level (pass-through) is latent.

The dynamics that take the amount of money will be the key element in determining what will happen to prices in Argentina over the next me ses. But the question is not reduced the flow of monetary issue that the Central Bank issued in 2016, but also what “is happening” with the stock of money “and” existing. That is, even if no weight of more than one is issued, if the money exceeds the existing “desired” money, a surplus of pesos (Money Overhang) is checked and the devaluation impact on accelerating inflation; not even when the central issue. Currently and according to our estimates, the excess weight would be about 4 percentage points of GDP (between $ 200,000 and $ 220,000 million millonnes) whose origins are twofold: first, the issue of runaway monetary K was; Second, the stocks Exchange era K . (…) “.