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Argentina’s annual inflation exceeded 100% in February, one of the highest rates globally and additional pressure on the South American economy, which experts say could enter a recession before this year’s presidential elections.
The National Institute of Statistics and Censuses (Indec) of Argentina confirmed that consumer prices increased in February at an annual rate of 102.5%, 3.7 percentage points more than in January. The data breaks the triple-digit barrier and represents the highest since September 1991 (115%), when Argentina was trying to leave behind the hyperinflation suffered between 1989-1990.
The month-on-month figure in the second month of the year was an increase of 6.6% compared to last January, evidencing an acceleration with respect to the rate of 6% of the previous month. He The inflationary rise was driven by food and beverages, which increased by 9.8%, a worrying figure due to its impact on the cost of the basic food basket.
The increase shows that the Argentine government’s measures to stop inflation did not have the expected effect. According to the official report, the country accumulated inflation of 13.1% in the first two months of the year, well above the 8.8% of the same period in 2022.
The figures distance the real possibilities of decelerating inflation to 60% this year, one of the main goals of the Administration to guarantee financial stability. “The government’s goal of inflation around 60% year-on-year for December seems increasingly unattainable,” said the Ecolatina consultancy.
Argentina suffers the impact of a severe drought that affects the price of some foods, as well as the pending increases in public service rates and the dynamics of salary recompositions in a year of presidential elections.
Another factor that feeds inflation are the restrictions on imports, the rising prices of the different exchange rates and the imbalances that drag the public accounts and the Central Bank.
“In the last three years, arrears have accumulated in electricity, gas and water rates, in transportation, health and other items with regulated prices,” explained Eugenio Marí, chief economist of the Libertad y Progreso Foundation.
This, added to the exchange and monetary imbalance, “makes it essential that, if inflation is to begin to fall, progress is made at least towards consolidated fiscal balance and the Central Bank is given real independence,” added the expert.
with EFE
