Argentina inflation exceeds 200%

Argentina has just surpassed Venezuela to become the country with the highest inflation in Latin America, with 211% last month.

Argentine officials announced on January 11 that the country's consumer price index (CPI) increased by 211% in December 2023 compared to the same period a year earlier. This is the highest level since the early 1990s.

Compared to the previous month, inflation here was 25.5%. This rate is lower than economists ' forecasts.

The latest figures make Argentina surpass Venezuela to become the country with the highest inflation in Latin America. In December 2023, inflation in Venezuela cooled down to only 193%.

Vegetables displayed for sale in a store in Buenos Aires, Argentina, December 2023. Photo: Reuters

"We have to limit spending on things that make life brighter. Old pleasures like inviting friends over for a barbecue are now impossible," Susana Barrio, 79, told Reuters.

Although Argentina has faced high inflation for years, the current rate is the highest since the early 1990s, when Argentina was in the throes of hyperinflation, with food prices skyrocketing.

New President Javier Milei wants to implement harsh austerity policies to reduce inflation, reduce the fiscal deficit and rebuild the government budget. However, he also warned that this will take time and things could get worse before they get better.

Argentina's inflation has the same causes as the rest of the world : the war in Ukraine, supply chain tensions and soaring public spending. But many economists say the problem lies within the country itself.

The country is spending more than it earns. Health care, education, energy, and public services are heavily subsidized or free. So to make up for the shortfall, they are printing more pesos. Economists say the policy of printing money and people losing faith in the peso has led to the current state of the Argentine economy.

Many Argentines are tightening their belts more than ever before. "Nothing is cheap. Before, I used to buy a kilo of potatoes, but now I only buy three or four so they don't spoil," said Graciela Bravo, 65.

Alejandro Grossi, a 49-year-old lawyer, said he was used to rising prices after years of inflation. "I adapt by buying less. Inflation and price changes are normal here," he said.

Ha Thu (according to Reuters)

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