Price growth slows little as inflation in Argentina approaches 300 percent

Prices in Argentina are rising despite encouraging signals of a slowdown, and the government will release the most recent figures on Tuesday, pushing the troubled South American nation’s annual inflation rate closer to 300 percent.

Although monthly inflation measurements have decreased since reaching a peak of more than 25% in December, retailers and customers claimed that the shift has not yet been completely realized on the ground. For the first time in six months, the inflation rate is predicted to marginally return to single digits in April.

“No matter how much the inflation rate goes down, which is what everyone says, it is not reflected here because look, there are items that should have gone down but haven’t,” remarked Buenos Aires fruit and vegetable vendor Sandra Boluch, 50.

She claimed that as a result of rising rent and higher input prices for items like plastic bags, her store was obliged to increase staff compensation, which in turn raised the sticker price of carrots and apples.

“These (prices) increase a lot and then that’s reflected elsewhere. Where? In the merchandise,” she continued. “Transportation is more expensive, diesel prices go up, everything goes up. So no matter how much we try to reduce prices, we can’t.”

President Javier Milei’s libertarian administration, which took office on December 10 and dramatically depreciated the peso currency, causing an initial inflation to jump, has boasted of its achievement in reducing monthly inflation. Milei’s administration inherited a severe economic crisis.

Investors have responded favorably to Milei’s hard austerity campaign of cost-cutting and market liquidity-sucking, which has also strengthened the government’s fiscal position and sparked a rebound in bonds and stocks.

The chief economist at consulting firm Libertad and Progreso Foundation, Eugenio Mari, stated that “he generated a monetary austerity shock, stopped injecting pesos into the economy, and gave a strong signal of fiscal austerity.”

Mari stated that things should improve, but that economic medicine has also had a significant negative impact on wages and economic activity.

“A significant decline in real wages suggests a decline in consumption, aggregate demand, and, most clearly, economic activity. However, what’s interesting is that real earnings can now rebound because of the decline in inflation.”

Buenos Aires retiree Ofelia D’Aquino, 65, was leaving a grocery when he stated he hadn’t noticed a drop in inflation yet. Workers in the public sector and retirees have suffered the most under Milei’s austerity.
“Prices are still expensive and we Argentines have very little purchasing power,” he stated.

“We hope that we can overcome this enormous catastrophe and that our sacrifice will help others. All of us and the future generations deserve it.”