Argentina’s Inflation Surpasses 100% for First Time in Three Decades
Argentina’s inflation has surpassed 100% for the first time since 1991, according to the latest consumer price index released by the National Institute of Statistics and Census (INDEC). The country’s annual inflation rate was reported at 102.5% in February, with a 6.6% increase in inflation for that month alone. The category of items most affected by inflation was food and beverages, with a 9.8% increase in food costs attributed to high prices for meat, dairy, and egg products. This latest inflationary jump comes as Argentina faces one of its worst economic crises in decades, compounded by a historic drought and wildfires in certain areas.
Argentina is a leading exporter of soybeans, corn, wheat, and other grains, but with crops failing in the country’s fertile grasslands, known as the Pampas, industry experts have lowered the country’s expected agricultural yields to levels not seen since the turn of the century. High temperatures, believed to be caused by climate change, have plagued the country since May 2022. Argentina has the second largest economy in South America, but its market has been notoriously volatile for much of the last century. A debt crisis in the 1980s led to chronic hyperinflation throughout that decade, with rates reaching over 3,000% at certain points.
In 2018, Argentina arranged a controversial deal with the International Monetary Fund (IMF) for more than $57bn in credit—the largest loan package in the fund’s history. However, inflation has continued to rise since then, and the country has struggled to keep pace with its repayment plan. A new $44bn loan deal was reached with the IMF in 2022 to replace the 2018 plan. On Monday, the IMF announced that it had reached a “staff-level agreement” to ease the country’s economic targets under the new debt plan, citing “the challenges of an increasingly severe drought.”
Shoppers on the outskirts of the capital Buenos Aires expressed frustration with Argentina’s economic struggles and the toll it was taking on their cost of living. One retiree shopping for groceries said, “There’s just nothing left. There’s no money. People don’t have anything, so how do they buy?” Another shopper expressed frustration at politicians’ seeming inability to curtail inflation: “I am tired, tired, just tired of all this, of the politicians who fight while the people die of hunger. This can’t go on any more.”
Argentina is set to hold general elections, including for president, this October.