Saturday, May 25, 2013

Links 20130525

1. Price controls in Argentina: The government freezes the price of 500 items in grocery stores. The measure is effective as of June 1, and will remain in place for an indefinite period of time. Apparently, Argentina's government did not get the memo.
The government has approved a list of 500 supermarket products that will maintain their prices for at least three months, effective as of 1st June.
Reportedly, the new price freeze list was originally meant to include 10,000 supermarket products. The scope of products covered by the price freeze was then allegedly reduced to 500 during yesterday’s meeting, and represents only 2% of total goods on sale in most large supermarkets. All other products will be subject to inflation-based price increases.
ASU Executive Director Juan Carlos Vasco Martínez said: “the 500 products on the list will remain frozen at February’s prices. The rest of the products will continue with the same scheme of price increases that existed before the freeze” in comments to Telam news agency.
The list of 500 products is only mandatory for ASU supermarkets. All other supermarkets must abide by a price freeze of 300 items, all of which overlap with those included in the lists for larger chains.
And the complete list of 500 items affected (in Spanish).
2. Brazilian companies are heavily taxed, apparently.
A study by the Inter-American Development Bank (IADB) shows that Brazilian companies need to work more than their counterparts around the world to pay their taxes. A middle-sized company has to work 2,600 hours to be able to afford its contributions to the government, according to data from the international organization.(...)On average, companies in Latin America and the Caribbean work 503 hours to pay their taxes. This is significantly less than in Brazil. Belize and Colombia are the countries where companies work the least for their taxes, with 147 and 208 hours, respectively. That means that a Brazilian company needs to work more than twelve times more for their contribution to the government than a Colombian company.(...)Generally, countries in Latin America and the Caribbean have a low tax load, which comes in at around 17.5 percent of GDP on average, compared to 24.1 percent of GDP in Eastern Europe and 25.4 percent of GDP in the OECD countries.
3. Peru: Declining growth and shrinking trade balance, after a period of fast rising home prices, faster-than-average growth, and low unemployment. Private sector debt has increased quite a bit too, over the last six years. The Economist worries about Peru's future too. Also, experts in Peru opine that the country's residential real estate may be in a pre-bubble (Spanish). 

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