LInflation in Argentina was 4% in Julythe lowest monthly figure in two and a half years and the third consecutive below 5%, reported this Wednesday the National Institute of Statistics and Census (Indec).
According to the criteria of
The consumer price index (CPI) reached 263.4% in the last 12 months, one of the highest levels in the world, while in the first seven months of the year it reached 87%.
The increases were driven by the categories “restaurants and hotels” (6.5%), “alcoholic beverages and tobacco” (6.1%) and “housing, water, electricity, gas and other fuels” (6%).
After the inflationary explosion of 25.5% in December, driven by the strong devaluation of the Argentine peso at the beginning of the government of Javier Mileithe CPI gradually moderated until reaching 4.2% in May, 4.6% in June and the current 4%, which was on the verge of offsetting the January 2022 mark (3.9%).
The Argentine government achieved its first fiscal surplus since 2008 in the first half of this year with the implementation of a drastic budget cutthe halting of public works, tens of thousands of layoffs, freezing of funding for education and health and reduction of pensions and social benefits.
“When we look at the activity map, the green lights are gaining ground, and technically the recession was at its worst in April and May,” Milei said to business leaders on Wednesday.
The ultra-liberal president praised the work of his ministers to achieve “an orderly macroeconomy to provide a definitive solution to inflation; a deep cut in public spending and an obsessive focus on deregulation and returning freedom to each and every Argentine.”
Has inflation ended in Argentina?
Presidential spokesman Manuel Adorni even said the day before that “inflation is an issue that is technically resolved,” adding that the government had done “everything that had to be done to resolve it.”
“What remains is time to see inflation collapse,” he said.
In contrast, for economist Ricardo Delgado, director of the consulting firm Analytica, “giving up inflation is too much for this moment in the economy.”
“There is a slowdown in inflation due to several issues such as economic activity at very low levels. Recession always produces a fall in inflation,” he explained to Radio Continental.
Consumption and economic activity have plummeted since December due to the devaluation of the peso and budget cuts. According to the Argentine Chamber of Medium-sized Enterprises, retail sales fell 15% year-on-year in July and 17% so far this year.
According to data from Social Security, more than 600,000 people have stopped contributing in the last six months, which could mean losing their jobs or moving into informal employment.
The government has recorded 115,000 confirmed job losses in the private sector, but claims that the first uptick was recorded in June.
Economist and opposition MP Martín Tetaz said that “after having systematically declined until May, inflation has been around 4% per month (60% annualized) for three months.”
“The plateau is consistent with the widening of the exchange rate gap and the real decline in term deposits,” he wrote on the social network X.
The International Monetary Fund forecasts a 3.5% contraction in the Argentine economy by 2024, before a 5% recovery by 2025.
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