Aligned with the Ministry of Economy, the new management in the Secretariat of Internal Trade renewed the program Now12, with a jump in interest rates of up to 11 points. Although financing continues at negative rates with respect to expected inflation, businessmen and analysts expect consumption to “weaken” along with a drop in purchasing power, especially in the most vulnerable sectors.
Alfredo González, president of the Confederation of Medium-Sized Enterprises (Came), warned that the increase in the Now 12 rates constitutes a “limitation” to consumption. “As much as the rate is negative and lower than the market rates, an increase of 11 points in installments is a high variation that will have an impact, more so in this inflationary context in which customers lose purchasing power,” he assured. For this reason, he asked to keep a “vigilance” in the evolution of billing: “You have to finance consumption to ward off recessive forecasts,” he added.
Analyst projections are in line with entrepreneurs and SMEs. “The last time the Now 12 rate was adjusted, billing for the program fell 25%. The most impacted categories will be clothing and household appliances, which are not usually purchased without quotas,” explained Sofía Ruano, a consultant in mass consumption. In any case, she explained that when consumption is analyzed, the panorama is heterogeneous, due to the income situation.
“Only registered employment beats inflation in some periods, so in that segment a rate movement may have little impact. But unregistered workers, who in the last figure for March were 15 points below inflation, if you raise the rate by 11 points on top of that, it will have a greater impact,” Ruano explained.
Under the wing of the Minister of Economy, Martín Guzmán, the Secretary of Domestic Trade, headed by Guillermo Hang, renewed the Now 12 with new rates. Payments in 3, 6 and 12 installments go from 33% to 42% of annual nominal rate, while, for 18 and 24 fixed installments, it grows from 38 to 49%. The rise in consumption is in line with the policy of the Central Bank, which raised interest rates for the sixth consecutive time.
The measure comes after the Now12 reached the second highest consumption peak since the series that prepared the CEP XXI began. The latest data shows that billing grew 99% in real terms on a year-on-year basis (between May 6 and June 6, 2022 against 2021, where the Hot Sale took place). In the home appliances and technology category, sales registered the highest peak of the entire series at the end of May, which begins in 2019, due to white line sales. Now 12 represents 1 out of every 4 pesos spent with a card, according to the Prism Index.
(AG)
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