Argentina is facing one of the highest inflation rates in the world, with an annual rate of 104.3% in March, according to official statistics. This is putting pressure on the government ahead of the October elections, with angry voters contending with a cost-of-living crisis that has pushed up poverty. The inflation reading for the month was 7.7%, higher than analyst forecasts of 7.1%, marking the fastest monthly rise since 2002. This is causing a strain on people’s wallets, with soaring prices hammering salaries and spending power, and pushing up poverty to nearly 40%.
The country, a key global grains exporter, is also grappling with one of its worst droughts in history, which has devastated soy, corn and wheat crops, knocking billions off the economy from lost exports and fanning domestic prices even as the war in Ukraine has already led to a massive spike in prices across the board. The government is hoping that a downward trend in inflation will be “reflected soon”.
For now, every trip to the supermarket is a reminder of the country’s inflationary crisis, the worst since 1991, which was the end of a period of hyperinflation. Retiree Juan Tartara said prices spiked with each weekly visit to the store. “Sometimes food increases 10 percent or 15 percent,” he said. “In one year, beef went from around 1,000 pesos [$4.66] or 1,200 pesos [$5.63] to 2,800 pesos [$13.05].”
Inflation will likely be one of the deciding issues for voters in the October elections, where libertarian economist Javier Milei has been gaining traction in the polls with his promises to break the status quo. President Alberto Fernandez’s approval rating has decreased as inflation soars and currently hovers just above 20%. He has not yet confirmed if he will seek re-election for a second term.
The soaring prices have also forced people to tighten their purse strings and buy cheaper products. Paola Lavezzari, who works in publishing, said inflation was forcing her to buy lower quality products. “The first thing you lose is the quality of the product. Because what you used to consume of a better quality, today is unaffordable,” she said. “Things were always maybe 10 pesos [$0.05] more, but now it’s 100 pesos [$0.50] more. … When you make the monthly shopping trip, it’s so much. The difference is huge.”
The government is facing a difficult challenge in dealing with the inflation crisis, particularly in the face of the drought and lost exports. It remains to be seen how they will address the issue and whether it will have an impact on the upcoming elections.