Prices begin to bite

Press, 20 April 1982, Page 8

Prices begin to bite

Buenos Aires,* a cosmopolitan capital, does not present obvibus, symptoms of pre-war fever.- Life seems normaal enough and the throngs of recently-arrived foreign correspondents looking for action have for the most part been disappointed. But what is abnormal is the sharp rise of food prices. Purchases of food staples are rising sharply,, as are prices because of markups by retailers hoping to cash in on the climate of uncertainty over the British-Argentine dispute over the Falkland Islands. “Don’t speculate,” says one of the new messages aired on the State-run TV channels. At the bottom of film showing a hand erasing a biack-

board-posted food price to replace it with one higher, the viewer reads: “Think about how much money means to you, then about how much the lives that are being risked for the country are worth. Don’t make your children ashamed of you.” Alberto Sciarreta, president of;, the. Buenos Aires Grocers;/ Association, said, food purchases last week 1 were up 15 per cent compared with previous weeks. .‘‘Expectation of conflict has caused people to acquire large quantities of critical products like oil, noodles, rice and powdered milk,” he said. Economy Ministry sources said they feared that the price mark-ups could cause a

sharp rise in inflation. Argentina was the world inflation champion last year with a rate of 130 per cent. The Economy Minister (Dr Roberto Alemann) imposed a fiscal austerity programme in January and held price rises to 5 per cent a month in February and March. Dr Alemann prohibited the buying of foreign currency after the Falklands invasion. The measure was intended “to prevent speculation against the peso, which would be improper in the moment the nation is living,” he said. Even so, banks have reported big withdrawal of Bankers in Uruguay have reported an increase in the transfer of capital from

Buenos Aires across the River Plate to Montevideo. Savings associations in Buenos Aires have raised iterest rates to 15 per cent a month in an effort to keep money in accounts and attract back some of that withdrawn. That is up some 50 per cent over rates effective from April 14, the day before the Argentinian invasion and occupation of the islands.