Inflation in Argentina is at its highest level in more than three decades.

According to data released by the Argentine Institute of Statistics and Census (INDEC) on February 14, inflation in the country in January rose by 254.2% compared to last year, the highest level in 32 years.

Specifically, the consumer price index in January increased by 20.6% compared to the previous month, lower than the 25.5% increase in December 2023 – also the highest in the past three decades. Meanwhile, inflation in December 2023 increased by 211% compared to the same period the previous year.

The consumer categories most heavily impacted by inflation are everyday goods and services, followed by food and non-alcoholic beverages, household appliances, maintenance services, and healthcare . Other affected categories include entertainment and culture, travel-hotels-restaurants, transportation, telecommunications, clothing, and footwear.

Despite being the second-largest economy in South America and a major global grain exporter, Argentina is grappling with serious challenges: sky-high inflation, two-fifths of the population living in poverty, and the potential for a recession.

The prices of clothing items in this South American country are unacceptably high, with the price of a new pair of jeans now costing more than a third of the average monthly minimum wage in Argentina.

Aylen Chiclana, a student in Buenos Aires, said: “With prices like this, we can’t go to the mall and buy whatever we like like we used to.”

Upon assuming power in December 2023, Argentine President Javier Milei warned that the country's fight against inflation was not over.

President Milei began his term by devaluing the peso by more than 50%, cutting transport and fuel subsidies, and eliminating price controls. He predicted that inflation would be brought under control within two years.

IMF Managing Director Kristalina Georgieva praised the strong measures taken by President Milei's administration to restore macroeconomic stability and address obstacles to growth.

At the end of January, the International Monetary Fund (IMF) made a new disbursement of $4.7 billion, as part of a $44 billion aid program for Argentina.

Last week, the Organization for Economic Cooperation and Development (OECD) projected that Argentina's economic growth would decline by 2.3% this year.

Minh Hoa (compiled)

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