13/09/2023 – 20:01
Inflation registered 12.4% in August in Argentina, the highest in a month since 1991, and people are juggling things to reach the end of the month.
The national statistics institute released, this Wednesday (13), data from the Consumer Price Index (IPC), which accumulated 124.4% in 12 months and 80.2% this year. Inflation in Argentina is among the highest in the world.
Monthly inflation has not been this high since February 1991 (27%), when the country adopted a process of fixed convertibility of the peso in relation to the dollar. The last time the monthly CPI reached double digits was in April 2002 (10.4%), precisely after the country abandoned this 1 to 1 fixed parity model.
The sector that suffered the most inflationary impact was food and non-alcoholic beverages, with an increase of 15.6%, “resulting from the increase in the prices of meat and meat products, and vegetables, tubers and legumes”.
– “There’s nothing” –
Meat, central to the Argentinean diet, increased by more than 30%. Common ground beef, the most popular, for example, increased 39.4% in August, according to the bulletin. More noble cuts also had important increases.
“There is nothing, there is no money to save,” teacher Karina Sablich told AFP, while shopping in an open market in Buenos Aires. “We live one day at a time, I work all day because with one job, we can’t handle it.”
Economy Minister Sergio Massa, the government’s presidential candidate, spoke shortly after the index was released.
“August was one of the worst months in the economic process of the last 30 years, due to an imposition from the International Monetary Fund,” he said.
He referred to the 21% devaluation of the peso on August 14, agreed with the IMF to release installments of the credit program signed with the organization for 44 billion dollars (approximately R$215 billion reais).
This was followed by a flurry of price markdowns just weeks before the presidential elections on October 22, in which opposition candidates promise to adopt an austere fiscal adjustment to stabilize the economy.
The market was already expecting double-digit inflation and the stock market closed in the black (2.84%).
– “A shame” –
The health sector registered an increase of 15.3%; home equipment and maintenance, 14.1%; and transportation, 10.5%.
“A shame,” wrote conservative candidate Patricia Bullrich. “It’s not just inflation, it’s the number that sums up the tragedy that Massa and Kirchnerism leave us with.”
Economist Victor Beker, director of the Center for New Economy Studies at the University of Belgrano, said that “an anti-inflationary plan is necessary”.
“But, certainly, by December 10th, it will not exist,” he explained to AFP. It is on this date that the new government will be sworn in.
Argentina has already had two episodes of hyperinflation: in 1989, at 3,079% annually, and in 1990, at 2,314%.
The country then adopted the “convertibility” model, supported by privatizations, deregulations and a total opening of the economy.
Annual inflation fell to single digits, but the increase in imports increased foreign exchange debt, ruined industry and caused a serious recession, which precipitated the political crisis of 2001 and the devaluation of the peso in 2002.
– Stretch the money –
Massa plans to announce new measures, which follow the one announced these days of increasing the minimum value of the range for paying income tax, which – he said – will improve the money in Argentines’ pockets by up to 21%.
Suspicious, people stretch their money as much as they can.
“There is total disbelief and we continue, despite everything, knowing that for now things will not change,” said Sablich. “That’s the saddest thing about being in this country right now: the uncertainty of not knowing how we’re going to get out, who’s going to get us out” of this situation.
The September FocusEconomics bulletin, which brings together more than 40 analysts from banks and consultancies, estimates that inflation will end 2023 higher than the previous year, “driven by the collapse of the peso amid monetary financing [mediante emissão monetária] of the fiscal deficit”.
“A faster-than-expected devaluation of the peso and fiscal generosity ahead of the October elections are key risks to the upside,” he said.
#day #Argentina #suffers #highest #monthly #inflation #years