Annual inflation in Argentina accumulates 78.5% in August, the highest in 30 years

First modification: 09/15/2022 – 04:11

An endless spiral. Consumer prices in Argentina reached 78.5% per year, the highest rate recorded in 30 years, while experts predict that by the end of 2022 annualized inflation will reach 100%.

The data was given by the National Institute of Statistics and Censuses, Indec, who reported that the inflation rate in August was 7% compared to July, a slight drop compared to the 7.4% rate that had been registered in the seventh month of the year.

According to Lautaro Moschet, an economist at the Fundación Libertad y Progreso, “the data for August, although it continues to be unusually high, nullified the suspicions of an inflationary spiral and, therefore, the exponential dynamics.”

Coincidence with the arrival of Sergio Massa to the Economy portfolio

This slight fall in prices in August compared to July coincided with the assumption of Sergio Massa as Argentina’s new Economy Minister and the announcement of his first measures aimed at trying to correct the country’s strong macroeconomic imbalances.

Before, Massa announced that July and August would be the two months of the year “most difficult in terms of inflation”, but assured that from September the price curve would begin to give way.

The Central Bank increased the reference interest rate to 69.5% in August to try to cool down inflation.

“It is a policy that goes a little deeper, at least seeking to stabilize in the short term. The monetary imbalance is attacked, limiting the financing of the Central Bank to the Treasury, interest rates are raised to take them to a positive level in terms reals, and a certain fiscal austerity is shown to comply with the agreement with the International Monetary Fund (IMF),” economist Fernando Baer told EFE.

Argentina and the IMF revised their inflation projection for 2022 in July, to a range of 52-62%, from a rate of 50.9% in 2021.

with EFE