Argentina’s Inflation Soars to 254% in 12 Months, But Shows Signs of Slowdown in January

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Inflation in Argentina has skyrocketed in the past 12 months, reaching a staggering rate of 254.2%, making it one of the highest interannual variations in the world. This alarming figure was reported by the official statistics institute, Indec. However, there was a slight glimmer of hope in January, as the inflation rate slowed down to 20.6%, down from 25.5% in December.

The decrease in inflation is seen as a positive sign for the economy. Economy Minister Luis Caputo has predicted that inflation will continue to be lower in the coming months of February and March. This is welcome news for the Argentinian government, as they have been grappling with a period of economic stagnation coupled with soaring inflation, also known as “stagflation”. The president himself had acknowledged the challenge shortly after taking office.

The recent devaluation of the peso, which experienced a 50% decrease in December, along with the adjustment of transport and public service tariffs, has contributed to the high levels of inflation in the country. Despite these efforts to control prices, monthly inflation is still close to the historical record set in February 1991.

Several sectors of the economy have been particularly affected by the inflation crisis. The prices of goods and services, transportation, communication, and food and non-alcoholic beverages have all seen significant increases in January. This has put a strain on households, with many struggling to afford basic necessities. One retiree, Elsa González, stated that she has had to cut certain items from her diet, such as cheese and meat, due to their rising prices.

The healthcare sector has been hit hard by inflation as well, with monthly increases averaging at 20.55%. Many individuals are finding it difficult to afford their necessary medications, forcing them to cut back on dosage. For instance, Ramón Zamudio, a 70-year-old janitor, stated that he has had to reduce his medication intake due to the high cost.

The government has been taking measures to address the inflation issue and stabilize the economy. Economy Minister Luis Caputo remains optimistic, stating that inflation is already on the decline and will continue to decrease in the coming months. The administration has launched an ambitious deregulation plan aimed at reducing the role of the State and achieving stability. However, these efforts have faced setbacks. The ultra-liberal Javier Milei, who plays a significant role in the government’s economic policies, recently suffered a major defeat when his proposed legislative changes failed to gain approval in Argentina.

The government’s focus on reducing the fiscal deficit has led to austerity measures, further impacting the population. The trade union federation, CGT, organized a 12-hour general strike in January to protest against the government’s policies. They are also calling for an increase in the minimum wage by 85%, which currently stands at 158,000 pesos.

The recent announcement by Indec regarding the basic food basket highlights the dire situation for many Argentinians. The basic food basket has been valued at 285,561 pesos, while the total basic food basket has reached a staggering 596,823 pesos. These figures further emphasize the struggle that many people in Argentina face in affording essential items for their daily lives.

While the slight slowdown in inflation in January offers a glimmer of hope, the high overall inflation rate in Argentina remains a pressing issue. The government must continue to implement effective measures to tackle this crisis and provide relief for its citizens.