Inflation in Argentina exceeds 200%.

Argentina has just overtaken Venezuela to become the country with the highest inflation in Latin America, reaching 211% last month.

Argentine officials announced on January 11 that the country's consumer price index (CPI) rose 211% in December 2023 compared to the same period the previous year. This is the highest level since the early 1990s.

Compared to the previous month, inflation here is 25.5%. This rate is lower than economists ' forecasts.

The latest figures have put Argentina ahead of Venezuela to become the country with the highest inflation in Latin America. In December 2023, inflation in Venezuela had cooled down to just 193%.

Vegetables on display in a store in Buenos Aires, Argentina, in December 2023. Photo: Reuters — Vegetables on display in a store in Buenos Aires, Argentina, in December 2023. Photo: *Reuters*

"We have to cut back on spending on things that brighten life. Past pleasures like inviting friends over for barbecues are now impossible," Susana Barrio, 79, told Reuters.

Although Argentina has faced high inflation for many years, the current rate is the highest since the early 1990s. At that time, Argentina experienced hyperinflation, with food prices skyrocketing.

Newly elected President Javier Milei wants to implement harsh austerity policies to reduce inflation, decrease the fiscal deficit, and rebuild the government budget. However, he also warned that this will take time and things could get worse before recovery.

Inflation in Argentina shares the same causes as in the rest of the world : the conflict in Ukraine, supply chain tensions, and soaring public spending. However, many economists argue that the problem also lies within the country itself.

This country is spending more than it earns. Healthcare, education, energy, and public services are heavily subsidized or free. Therefore, to compensate for the shortfall, they are printing more pesos. Economists argue that this money-printing policy and the public's loss of confidence in the peso have led Argentina's economy to its current state.

Many Argentinians are tightening their belts more than before. "Nothing is cheap anymore. Before, I used to buy a whole kilogram of potatoes, but now I only buy three or four so they don't spoil," said Graciela Bravo, 65.

Alejandro Grossi, a 49-year-old lawyer, said he's become accustomed to rising prices after years of inflation. "I've adapted by buying less. Inflation and fluctuating prices are normal here," he said.

Ha Thu (according to Reuters)

Source link