Argentina recorded July inflation of 7.4%, the biggest monthly increase in two decades, meaning the cost of living continues to soar, rising 46.2% in the first seven months of 2022, amid weeks of protests for the decline in citizens’ purchasing power.
The index, announced yesterday by the national statistics institute (INDEC), worsened further compared to June (5.3%): cumulative inflation in one year thus reached 71%, a level that is among the highest in the world.
Argentina, Latin America’s third-largest economy, has faced double-digit monthly inflation for two decades. In 2021, price growth reached 50.9%.
Relying on the recovery of economic growth after the new coronavirus pandemic (7.4%), the government hoped to limit it in 2022, with a series of fiscal discipline measures, keys to the agreement with the IMF in March on the refinancing of the debt.
But the war in Ukraine, global inflationary trends and the course of the peso extinguished any hopes. Several economists forecast the ratio to hover between 90 and 100% in 2022.
A feverish July added to the turmoil, with the resignation of Economy Minister and architect of the IMF deal, Martin Guzmán, the brief tenure of economist Silvina Batakis, following the appointment eight days ago of a much more experienced politician—Sergio Massa , former Speaker of the House— in office, to reassure the markets.
With the economy de facto bi-currency, as many in Argentina account and save in dollars, the peso plummeted within a month from 220-230 to 295-300 against the US currency.
There are more and more protests from week to week, with a central demand that measures be taken to protect the most vulnerable. The official poverty rate in Argentina stands at 37%. There is, however, a safety net of benefits, aids and welfare organizations that is truly unparalleled in Latin America.
Demanding that the minimum wage be doubled to 105,000 pesos ($744), several thousand people demonstrated without incident in Buenos Aires last Wednesday, and hundreds of them camped out and spent the night in front of the presidential building, at the call of leftist organizations. of the center-left government of President Alberto Fernandez.
SOURCE: APE-ME
Source: Capital
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