Sergio Massa presents relief measures for the middle class, but will they be enough amid high inflation?

Sergio Massa presented relief measures for “the middle class” in the last hours. Roughly speaking, and according to the agreement reached by the banks, credit card limits were extended by 30% for purchases in installments; 25% for purchases with credit cards in one payment; y 25% for limits on checking account advances to MiPymes.

Some economists consulted by PROFILE expressed that these measures are palliative but that in general terms they will accompany the upper-middle and upper sectors more than the lower-middle and lower sectors, which are the ones that cannot really consume today.

Fabián Castillo, head of FECOBA, recalled that the government implemented these measures focused on sustaining consumption and production “in a context of marked inflationary acceleration and an exchange rate gap that continues to widen due to the skyrocketing of the blue dollar in recent weeks.”

And it is that from the side of business chambers understand that it can be a stimulus for trade, but They do not rule out that they also complicate life with delinquency to those who already have their income very worn.

Economists explain that Massa’s measures are not enough amid extremely high inflation

By case, from the Economic Federation of the province of Buenos Aires ensure that the measures will lead “relief” to consumersy will help to move the sales of small merchants, but they also expressed their concern for those cases in which it is difficult to pay the card statement at the end of the month.

“This It is good for bringing relief to Argentine families and guaranteeing them greater access to credit, and in this way encourage consumption,” he assured PERFIL Camilo Alberto Kahale, president of FEBA, and added that the 25 percent increase in current account advance margins for micro, small, and medium-sized enterprises (Mipymes) is also very interesting. “These measures mean an increase in credit available to SMEs, mobilizing the internal market.”

However, He also made a “provision” regarding the announcements: “It is important to add something that we have been asking for from FEBA, related to those who cannot pay the card at the end of the month“, he recalled and expressly requested “That the interest is 50 percent. “It’s very good to give people more credit, but if they can’t pay later because the interest on the card exceeds 100 percent, it ends up being counterproductive,” he added.

The view of the Chamber of Commerce

For their part, from the Chamber of Commerce (CAC) they expressed to PROFILE a position similar to that of the FEBAi by indicating that the measure “can collaborate with consumption and give it greater dynamism.”

“In some way it complements what was reported days ago with the announcement of better financing conditions for the Now 12 program,” they explained from the entity and added that “these improvements make consumers more likely to consume,” with which the new extension of the credit card limit “makes it possible for them to consume. In practical terms, first an attractive rate is offered for them to buy and with this a margin is given so that they can buy“, they added.

Massa gave another relief to the middle class, but the banks left him a list of claims

This means that “families effectively have a greater margin to consume with current wages,” they said.

They also emphasized the situation that, hand in hand with the inflationary acceleration of the last few months, the purchasing power of many families has deteriorated. “Considering this deterioration as a given, the measure somehow offsets this negative effect on consumption and alleviates the situation by allowing them to finance a greater amount of purchases”; they added.

Will these measures bring more inflation?

Regarding which items to which this benefit can be transferred, they indicated that it will be a fairly broad question and will depend on the limit that each consumer has. “For consumers who have low limits, even though they have expanded it now, they will surely be able to purchase products in areas such as footwear and clothing but not a large appliance, because they will not reach the amount they have assigned. Consumers with higher amounts will be able to purchase goods of greater value,” they said.

As for whether it will have a greater impact on the evolution of prices, the CAC spoke out against the idea. “Inflation in Argentina is very high, but this is not explained by consumer financing programs or credit card limits, but by macroeconomic issues, such as exchange turbulence, the monetary issue and the chronic deficit that they register public accounts”, expressed from the institution that presides Mario Grinman.