Argentines expect 20% inflation in the next year, double the official rate and consumer confidence has shed 21% after hitting an all-time high in January, according to a survey done this month by Torcuato Di Tella University.
Although elected president Cristina Fernández de Kirchner is a new face, her government will be largely perceived as a continuation of Nestor Kirchner's administration, giving her less margin to address these nagging concerns. Mrs. Kirchner fiercely rejects the pro-market policies of the 1990s, which many blame for the 2001 crisis, and she backs a weak peso to help "re-industrialize" Argentina and boost exports, according to her latest remarks. The president-elect also bristles at monetary recipes for controlling inflation by cooling the economy, saying more investment is the key to taming prices while fueling growth. She has called for a broad "social pact" between the government, big business and unions on how to sustain growth, and share its benefits, in the longer term. In the final days of the campaign the elected president stressed her role as Kirchner's top advisor, taking joint credit for the country's rebound from the 2001-02 financial and social crises. In the last four years the Argentine economy has expanded 50%. However it's not clear how she will manage some downsides of her husband's legacy: energy shortages, shrinking budget surplus, depressed public utility rates and inflation, which is among Argentina's biggest worries. "All changes and all policies should be gradual" said the elected president. Economy Minister Miguel Peirano, whom many expect to continue after Cristina Fernández takes office on December 10, told local radio that the first lady will continue Kirchner's policies. "Argentina must meet the challenges of achieving full employment, improving the distribution of wealth and fueling further economic growth" Peirano said on Sunday. Overall many analysts expect the incoming administration to move gradually to reduce government spending, restore credibility to official inflation figures, and raise utility rates. But they do not expect much more.