Since businessmen did not reach an agreement with the authorities, the Fernandez administration took this decision to control short-tem inflation levels.
On Tuesday, Argentina's Commerce Secretary Roberto Feletti signed a resolution that freezes the price of 1,432 consumer products. This policy will be in effect until January 2022.
Since prices will be fixed according to the inflation rate in effect on Oct 1, the price of some goods could be reduced by up to 50 percent. Recently, President Alberto Fernandez's administration had conversations with the private sector to find a solution to the inflation rates. Since no agreement was reached, the government decided to act immediately.
The ministerial resolution also asks companies to increase the production levels of the goods included in the list and to ensure adequate logistics to stores and markets. Authorities will sanction those who do not comply with these provisions.
"The price freeze has never worked. Almost all previous administrations have tried to stop inflation this way. It never works," the Argentina's Commerce Chamber Director Mario Grinman said and warned that this policy will prompt shortages.
"We do not accept threats aimed at the Argentinian people. We just are trying to help the people of Argentina in these trying times at least through the end of the year," Feletti replied, adding that "the government's decisions are judged by the people , not by a businessman. "
"It does not seem impossible for companies to freeze the prices of almost 1,500 products for 90 days," the Commerce Secretary said and recalled that cumulative inflation reached 37 percent at the end of September.
If no active control policies are undertaken, inflation will reach 48.2 percent by the end of 2021, according to the Argentinean Central Bank.