Weekly Report - 16 March 2023 (WR-23-11)

ARGENTINA: Inflation breaks psychological threshold

When Argentina’s national statistics institute (Indec) published the annual inflation figure for 2022 of 94.8% in January, the presidential spokesperson, Gabriela Cerruti, praised the stewardship of the economy minister, Sergio Massa, for keeping inflation “below three digits” in defiance of the pessimistic predictions of “consultancies and the media”. Two months on and the pessimists have been vindicated: annualised inflation topped 100% in February.

Monthly inflation in February reached 6.6%, Indec reported, bringing 12-month inflation to 102.5%, a 30-year high. It was driven by the high cost of food and non-alcoholic beverages, prices of which jumped by 9.8%.

Failure to get a grip on inflation is likely to put paid to the electoral hopes of the ruling left-of-centre Frente de Todos (FdT) coalition later this year. It would also sink any lingering presidential ambitions that Massa might harbour.

The Kirchnerista faction of the Partido Justicialista (PJ), the mainstay in the FdT, loyal to Vice President Cristina Fernández, has been at pains to distance itself from the government led by President Alberto Fernández and its debt restructuring deal with the International Monetary Fund (IMF) to preserve its electoral prospects.

During a public appearance on 10 March at the Universidad Nacional de Río Negro to receive an honorary degree, Vice President Fernández strove to do the same while delivering a speech entitled ‘Hegemony or consensus? Rupture of the democratic pact in a dual currency economy: inflation, the IMF, debt crisis, and political fragmentation’. But there are signs that her plan, known as ‘Operación Clamor’, to achieve a political comeback and win a third presidential term, is not taking off.

Has ‘Operación Clamor’ played out?

Earlier this year Vice President Fernández appeared to have got herself locked into something of a political dead end. She had been convicted in December by a court in the ‘Vialidad’ corruption case, accused of improperly awarding 51 public works contracts, sentenced to six years imprisonment, and barred from holding public office. Fernández dismissed the court as politically biased. Although as vice president she enjoys immunity from prosecution, in a perhaps ill-advised gesture of defiance she said she would “not be a candidate for anything” in the polls due in October.

‘Operación Clamor’ was suggested by her supporters to get out of the fix. The essential idea was that Fernández would present herself as the victim of an unfair and establishment-controlled judiciary that had ‘banned’ her from running for election. Under the plan, a wave of her supporters was supposed to rally round, convincing her to change her opinion and, by popular demand, to run for president after all.

But after only a couple of weeks the idea appears to have run out of road. It is claimed that private opinion polling by the Kirchnerista faction, shows her support is not gaining momentum as they had hoped. Meanwhile, the FdT remains deeply divided. Electoral deals are elusive, and cabinet ministers close to President Fernández (who does not rule out himself running for re-election) have shown little sign of joining the ‘clamour’.

Part of the problem is the unfolding legal cases against Vice President Fernández. And on 9 March the Tribunal Oral Federal Nº2 (TOF 2) published the grounds for its six-year prison sentence for defrauding the state and six-year bar on her holding public office. In a 1,616-page document, the TOF 2 said that she was guilty of “a serious incident of corruption without precedent”, citing “colossal damage caused” to state coffers amounting to some Ar$84.84bn (US$424m at the current exchange rate). It also dismissed her attempt to portray her prosecution as judicial persecution, or ‘lawfare’, as merely an attempt to evade responsibility and discredit the legal process.

This has all led some of Vice President Fernández’s advisers to offer a ‘Plan B’: essentially that, in spite of her December outburst, she should run for a position in the federal senate to represent the province of Buenos Aires. This would bring a big name to a close-run fight in the province, while presenting her with an extended period of immunity from the courts. It might prove to be the best option open to her.

Drought impact on elections

Drought could have a major electoral impact. Argentina’s long drought has intensified, with a potentially critical effect on the presidential race. The national meteorological service says the country is now experiencing the worst drought in 60 years, with nine successive heat waves since November.

Soya, maize, and wheat harvests are expected to be down by 30-40% with total economic losses costing over US$20bn. Fires have triggered power cuts. With foreign currency scarcity forcing a reduction in essential imports, Argentina could suffer continuing inflation and an economic contraction of around 3% this year. This could end up decisively pushing an angry electorate away from the incumbent FdT coalition to favour opposition candidates of the centre and far right.    


Gabriel Rubinstein, the secretary of economic policy, acknowledged in a statement that “the February inflation data is without a doubt very bad”. Rubinstein blamed the ongoing drought, which has affected agricultural production, driving up food prices.  

Appeals process

Vice President Fernández will appeal her sentence, starting with the Cámara de Casación Penal, which could confirm or overturn the TOF 2’s verdict or change the length of sentence. If this outcome is unfavourable, she could then make an extraordinary appeal to the supreme court, meaning that a firm conviction is unlikely before the end of 2024 or 2025, allowing her to compete in October’s general election.

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