Argentina Faces Historic Inflation: Rate Hits 211.4%, a 32-Year High
In Buenos Aires, Argentina, the nation’s annual inflation rate reached 211.4% in 2023, marking the highest level in over three decades. This information, released by Argentina’s INDEC statistics agency, underscores the country’s severe economic challenges.
These figures are largely attributable to the drastic actions taken by conservative President Javier Milei, who sought to control the nation’s rising inflation through measures like a significant 50% devaluation of the Argentine peso. In comparison, the inflation rate was around 95% in 2022.
The monthly inflation rate in December was 25.5%, a significant increase from November’s 12.8% but slightly below the government’s predicted 30%.
Before releasing these figures, President Milei, in a radio interview in Buenos Aires, had suggested that a monthly inflation rate below the forecast would signify a major achievement. He remarked, “If the number is closer to 25%, it means the success was tremendous.”
During his inaugural address, Milei had unveiled a rigorous economic plan to combat hyperinflation. He cautioned that these measures would initially have a detrimental effect on various aspects of the economy, including employment and poverty levels. About 40% of Argentina’s population is estimated to live in poverty.
Milei also mentioned his plans to dollarize the Argentine economy once macroeconomic factors stabilize.
Rising Costs of Essentials and the Hope for Stabilization
According to INDEC, food and non-alcoholic beverages, major contributors to the annual inflation, witnessed an average increase of 29.7% in December. Other widely consumed products saw prices rise by approximately 30%, while medication costs soared by an average of 40%.
Economic consultancy Eco Go anticipates a minor reduction in food prices at the start of January, projecting a monthly living cost increase lower than December’s 23%.
Milei acknowledged the ongoing adjustments in relative pricing, stating, “We are going to continue to see a period of inflation with horrible numbers, but then we’ll see that the next step will be the fall of inflation.”
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