Inflation in Argentina reached 6.27% in March, the highest rate in two decades. The situation – the result of years of populist policies in the country – has led to the impoverishment of the population. For this reason, Argentines have protested and demanded action from President Alberto Fernández.
The Argentine Miguel Díaz lives in the Nueva Pompeya neighborhood and used to buy everything at the grocery store on the corner of his house. But in recent times, he has taken advantage of his job as a driver to look for offers in various parts of the capital Buenos Aires. “You can’t buy in one place, you have to look for the best price”, he says.
And whenever, on the way, there is a good offer, the way is to get out of the car and buy. This is especially true for food, which is getting more and more expensive. “There is no salary that is enough nowadays to buy. It’s very difficult. I live here with my son and it’s difficult. I don’t even want to imagine for someone who has three or four children”, says the Argentine.
Miguel’s anguish is shared by a large part of the population. In March alone, the country’s inflation reached 6.7%, the highest monthly rate since the 2002 crisis, 20 years ago. Inflation for the last 12 months reached 55.1%.
“It’s hard. You cannot be without work. Otherwise, there is no food”, says bricklayer Jose Luis Rodriguez.
And precisely food has weighed heavily on the pockets of Argentines. In the first three months of 2022 alone, food and alcohol price increases were nearly 20%, 3.5 points higher than overall quarter inflation. The phenomenon erodes the income of the most vulnerable sectors, and is expected to impact poverty rates, which reached 43.8% at the end of last year, according to the Argentine Social Debt Observatory.
“The main cause of Argentine inflation has to do with fiscal imbalances. Argentina has always financed this, particularly in recent times, with currency issuance, generating the seed of inflation”, says economist Ariel Barraud, from the Argentine Institute of Fiscal Analysis.
Barraud believes that, in addition to the chronic fiscal deficits and years of populist policies, exacerbated by the government of Peronist Alberto Fernández, exchange rate pressure and the population’s own expectation that prices will increase exacerbate the problem.
“What generated the situation we are in now was the growth of state participation at all levels of the economy. The private sector finds itself somehow stifled by tax restrictions and competition restrictions”, adds the economist.
Despite successive Argentine governments trying the populist policy of freezing the prices of some basic items in an attempt to contain inflation, the strategy has clearly not worked to protect consumers’ pocketbooks. Official data released this Thursday (21) show that, in March, the prices of the total basic basket, which includes basic food and non-food items to avoid being in the poverty line, once again surpassed inflation and increased by 7%.
President Alberto Fernández even tries to alleviate the situation with income transfer programs, for example. But the left-wing coalition faces an internal rift between Fernández and vice-president Cristina Kirchner. She was against the agreement to renegotiate Argentina’s debt with the International Monetary Fund (IMF), which provides for, for example, the reduction of electric subsidies.
The president of the Federation of Warehouse Owners of the Province of Buenos Aires is pressing the Fernández government for solutions to deal with the situation. “Price increases come to us every day. Not long ago, we received notice of an increase in a battery company, between 19% and 20%. This is not only aggressive, but leaves us unprofitable”, says Fernando Savore, president of the federation.
At the other end of the crisis, the population is also asking for solutions. Several protests organized by social movements have taken to the streets of Buenos Aires in recent days. The feeling of the Argentines is summarized in a banner that says: “we produce, but we are still poorer”.
Source: CNN Brasil
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