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According to the National Institute of Statistics and Censuses, Indec, annual inflation shot up to 71% last July, while the month-on-month variation was seven percentage points higher than last June.
Consumer prices in Argentina advanced 7.4% last July, the largest monthly inflationary jump in the last 20 years, amid strong exchange and political tensions.
The data was reported by the National Institute of Statistics and Censuses, Indec, which revealed that inflation shot up last July to 71% year-on-year, seven percentage points above the variation registered in last June. Prices also accelerated compared to June, when the inflation rate had already been a very high 5.3%.
The month-on-month jump of 7.4% recorded in July is the largest since April 2002, when inflation soared after the outbreak in late 2001 of a severe political, economic and social crisis in Argentina.
“In year-on-year terms, retail inflation exceeded the 70% barrier, the highest since the hyperinflation of the early 1990s,” said Eugenio Marí, chief economist at Fundación Libertad y Progreso.
Argentina has just experienced an internal crisis in the Government of Alberto Fernández, which began with the resignation of Martín Guzmán as Minister of Economy and his replacement by Silvina Batakis, but three weeks later, Batakis left office and Sergio Massa was appointed as head of the economic portfolio.
The changes caused the markets to operate on edge, particularly in the foreign exchange market, with a jump of up to 40% in the parallel prices of the US dollar that, as is common in Argentina, quickly moved to the prices of the actual economy.
“After Guzmán’s resignation, the exchange rate volatility and the greater restrictions on the financing of imports resulted in the ideal scenario to accelerate a price re-marking that already came with a high inertia,” LCG reported.
The increase was widespread but the most worrying is in food, 6%, a rise that fully impacts the value of the basic basket that marks the poverty line, already very high in Argentina, approximately 37.3% in the second half of 2021, according to the latest official data available.
The Central Bank of the Argentine Republic announced an increase in the reference interest rate, which goes from 60 to 69.5% annual yield, due to the acceleration of inflation in the South American country.
with EFE
