Friday, June 9, 2023

Fall in prices and paralyzed activity, harsh impact of rising dollar

cost overruns; lack of value reference; Lists that are updated most often; provider update; lack of supply; missed budget; staff Self-employed who cannot transfer costs to their fees and sales that are deferred or do not materialize, All this and much more causes sharp movements of the dollar.

Various levels of the real economy, from large companies to small businesses, felt its impact. Casual The rise from the free dollar and deep financial volatility last week. All saw their activity affected, already affected by the loss of wage purchasing power and high inflation. And while the government delays decisions and chains “under study”, with “advertising announcements” measures Uncertainty captures economic agents and the level of activity stagnates.

“in this context, An economy cannot operate. The shops and companies don’t know at what price to sell and everything slows down”, explains Juan Ignacio Paolichi, an economist at Emperia consulting firm.If high inflation continues, real wages begin to decline and consumption worsens; there will be less activity Analyst adds.

Instruments are one of the most sensitive commodities to exchange rate volatility.
Instruments are one of the most sensitive commodities to exchange rate volatility.Rodrigo Nespolo

beyond the fact that the government insists that The blue dollar “has no effect on the real economy”, this price increase and last week’s fiscal dollar turned microeconomic dynamics. as published CountryDuring the week gondolas decreased and prices increased: many suppliers decided to suspend sales to wholesalers and self-service stores, and the most serious problems occurred in flour, oil and sugar.

That is, for many businesses or companies, uncertainty about the replacement cost of their goods, or ultimately about the dollar value of whether they will be able to buy supplies or renew stock, This generated a dynamic of curbing activity and price comments. “It is the choice between deciding to sell short or to sell but do it at a higher price to cover”, Gabriel Camano, principal analyst at Consultora Ledesma, explains. Also affecting inflationary dynamics is the tightening of stocks for those who must import products or supplies, which incur financial costs and uncertainty due to the conditions for access to foreign exchange or money at the official exchange rate. Get the option to pay these actions in the financial section.

no value reference, Preventive redials become more frequent or, outright, operations are postponed. While price lists for stores are updated, on e-commerce sites, it is common to find publications withheld by sellers who choose to suspend their sales to avoid potential losses, and upward-adjusted new ones. Let’s resume your activity with values. instrument, instrument, electronic device, clothing or musical instrument There are some imported items which were affected by this type of movement.

Meanwhile, in the mass consumption sector, Companies warn of tensions between prices and costs, especially due to increases in raw materials, energy and fuel. On demand levels, the market warned that inflation was expected to pick up in the first two weeks of the month due to “stock buying”, but they confirm that dynamics returned to normal later.

where The activity was paralyzed in the sale of properties. yes ok Used apartment prices have fallen by an average of 39% in dollars since the 2018 maximum. Uncertainty slowed the pace of decision making, according to the Real Estate Report. “In recent months we have seen an improvement in the number of operations due to the stability of the exchange rate. But When devaluation occurs, the first thing that happens is that the one who hasn’t made the decision delays or waits. And the one who started the operation had made the decision and already had the dollars, it would be hard to turn back”, says the firm’s owner, Jose Rosados.

In the car market, exchange rate differences produced the opposite effect and added to the imbalance as the price of dollar blue Allows people who already have tickets saved to make a ‘roll’ and reduce the price of their cars. But there is also uncertainty among sellers regarding the price and replacement cost of the units in the market.

Without price references, dealerships hesitate and put the brakes on unit sales, both 0km and older cars. “The volatility of our currency” paralytic operationAlejandro Lamas, secretary of the Automotive Chamber of Commerce (CCA), said. On the production side, the terminals have warned that while access to supplies and foreign exchange conditions for imports are “normal” at the moment, they monitor vehicle manufacturing on a daily basis.

In the tourism sector, meanwhile, dynamism escaped the general trend that in conditions of uncertainty, decision-making slows down and consumption is postponed. because although the government In fact, as card dollars became more expensive, taxes on profits and personal property increased the assumption from 35% to 45%, Today that price (around 238) looks ‘affordable’ compared to other denominations of the dollar: at $338, the blue dollar is about 44% more expensive.

In that scenario, Those who have a certain margin of savings and had a trip in their plans, got the opportunity to ensure the price of tickets in pesos and accelerate those purchases to shield themselves. Against a rise in the exchange rate, an increase in taxes or an increase in access to foreign exchange or stamps, a regulatory change the government may order. “Demand increased this week”, Julian Gurfinkiel, co-founder of Turismocity, an online platform that focuses on air ticket offers across various sites and agencies.

According to the executive, last week there was a 10% increase in air ticket purchases in the medium term, despite an environment of exchange uncertainty and a rise in free prices. According to Gurfinkiel, the increase in demand was focused on travel for the next summer and The most sought-after destinations were the United States, Europe, and Brazil. Another item that users grew looking for was Cabotage tickets for the month of August.

Nation World News Desk
Nation World News Desk
Nation World News is the fastest emerging news website covering all the latest news, world’s top stories, science news entertainment sports cricket’s latest discoveries, new technology gadgets, politics news, and more.
Latest news
Related news


Please enter your comment!
Please enter your name here