Argentina's Inflation Soars to 124 Percent, Highest Since 1991

Argentina
Illustration of Inflation. (Credit: Pixabay)
Argentina's annual inflation rate surged to 124.4 percent in August 2023, reaching the highest level since 1991.

The rising prices, higher than expected, are forcing consumers to seek cheaper options as the price hikes leave a significant difference from one store to another.

Quoting US News on Thursday (September 14, 2023), Argentina's inflation figure for August 2023 touched 12.4 percent, a surprisingly high number even as an annual figure in most countries worldwide, pushing the poverty rate beyond 40 percent.

"Every day, goods in Argentina become more expensive, like always racing against time, searching and searching," said a resident named Laura Celiz while shopping for groceries in Tapiales, Buenos Aires.

"This way, we try to beat inflation or at least compete with it," added Laura's husband, Fernando Cabrera.

Central bank analysts' polls, released after the inflation data, estimated Argentina's year-end inflation to be above 169 percent.

This figure is a sharp increase from the previous month's estimate of 141 percent.

They predicted Argentina's monthly inflation to be 12 percent in September and 9.1 percent in October.

Reportedly, Argentina is currently in an economic crisis cycle, with a loss of confidence in the peso leading to continuous depreciation, triple-digit inflation, negative central bank reserves, and a sluggish economy due to drought affecting the agricultural sector.

Haunted by Uncertainty

Argentina
Illustration of the Concept of Inflation. (Credit: pexels.com/pixabay)
The country is also struggling to salvage a $44 billion deal with the International Monetary Fund (IMF) and is facing the prospect of a $16 billion legal bill after a US court decision related to the state's takeover of energy company YPF a decade ago.

Inflation itself could worsen amid election uncertainty, which has rekindled memories of hyperinflation in the 1980s among Argentinians who experienced it.

"Some estimates say inflation could rise to 180 percent, that's why we're talking about a record inflation rate," said local economist Damian Di Pace, adding that other countries in the South American region are seeing inflation recede.

Triple-Digit Inflation

Argentina
Illustration of Inflation. (Credit: pexels.com/pixabay)
"While other Latin American countries experience single-digit inflation, Argentina has already reached triple digits," he said.

"The 20 percent currency devaluation imposed by the IMF, we know that will harm the pockets of all Argentine families," he added.

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