In 2022, Argentina once again experienced a difficult year economically. The South American country has experienced annual inflation of 94.8% – one of the highest rates in the world – and it has not been recorded for thirty-two years.
The December index published on Thursday 12 January by the National Institute for Statistics and Census (Indec) confirms a relative decline in recent months, down from 7.4% in July, 6.3% in October and 4.9% in November. Inflation in Argentina in 2021 was 50.9%. The government hopes to curb it, limiting it to 60% by 2023, based on its budget.
The previous peak was from 1991, with several consecutive inflation rates above 100%, marking the end of a cycle of hyperinflation in one year (over 1,000%).
“As you choose a jewel”
The evolution of some food labels makes you dizzy: a liter of milk has increased by 320% in three years, oil by 456% by the end of 2022, sugar by 490%. Institution of Abset Board.
“You stand in front of the shelves, analyzing the prices, like you’re choosing a piece of jewelry … I stopped at the bakery, and it was crazy. I almost stopped for grated cheese, almost 3,500 pesos. [environ 17,50 euros au taux officiel] per kg when it does not reach 1,000 [5 euros] A year ago…”While shopping in Parque Chacabuco, a district of Buenos Aires, the retired Agence France-Presse explains to Julien Ratano.
“Milk, cheese, eggs, no price has anything to do with it anymore. A box of 30 eggs, I bought a year ago for 150 or 200 cents. [près de 1 euro]700 is on [3,50 euros] Today! »Roxana Pardo, a 34-year-old shopper, mills about in a supermarket in the same middle-class neighborhood.
Argentina, Latin America’s third largest economy, has been mired in twelve years of double-digit inflation, due to a number of internal (persistent budget deficits, high inflation expectations) and external (impact of the war in Ukraine) factors that have hindered the overall macroeconomic recovery, especially post-pandemic.
After a 10.3% increase in activity in 2021 following a three-year slowdown, the country should end 2022 with growth of around 5%. In 2023, this growth should be around 2%, which would be as sluggish as the entire global economy, but one of the strongest in Latin America, according to World Bank forecasts this week. Argentina’s three consecutive years of growth from 2006, 2007, and 2008 would be unprecedented, and the government of Alberto Fernandez (left of center) did not hesitate to withdraw.
Wages struggle to keep up with inflation
December’s prices, according to the index, were mainly driven by the hotel and restaurant, drinks and tobacco sectors, which is not an unusual occurrence during this Australian summer.
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Economy Minister Sergio Massa – the third in a year – now 3% and 4% monthly, the gradual restructuring of foreign exchange reserves – especially through record exports in 2022 – , and increased fiscal discipline to stabilize the economy (the deficit target falls from 2.5% to 1.9% in 2023) .
It has so far, as of last December, satisfied the International Monetary FundArgentina reached a deal in March to refinance more than $44 billion in debtLegacy of debt contracted in 2018.
But with activity rising for two years and unemployment falling (7.1%), wages are struggling to keep up with inflation, and an informal job is no guarantee of uncertainty. So according to the latest figures from mid-2022, 36.5% of the 47 million Argentines are in poverty, including 2.6 million in extreme poverty.
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