18 minutes
BUENOS AIRES: Argentina’s annual inflation rate shot up to 124.4% in August and hit its highest level since 1991, stoking a painful cost-of-living crisis in the South American country.
The soaring prices, which rose more than expected, are forcing hard-hit shoppers to run a daily gauntlet to find deals and cheaper options as price increases leave big differences from one shop to the next, with scattered discounts to lure shoppers.
The August monthly inflation reading of 12.4% – a figure that would be eye-watering even as an annual figure in most countries worldwide – is pushing poverty levels past 40% and stoking anger at the traditional political elite ahead of October elections.
“It’s so hard. Each day things costs a little more, it’s like always racing against the clock, searching and searching,” said Laura Celiz as she shopped for groceries in Tapiales on the outskirts of Buenos Aires. “You buy whatever is cheaper in one place and go to the next place and buy something else.”
Her husband, Fernando Cabrera, 59, was doing sums on a calculator to compare fruit and vegetable prices. “In this way we try to beat inflation or at least compete with it a little,” he added.
A central bank analyst poll, released after the data, forecast inflation would end the year above 169%, a sharp increase from its estimate a month earlier of 141%. It predicted monthly inflation of 12% in September and 9.1% in October.
Argentina is caught in a cycle of economic crises, with a major loss of confidence in the peso driving steady depreciation, triple-digit inflation, negative central bank reserves and a flagging economy due to drought hitting farming.
The country is also battling to salvage a US$44 billion (RM20.5 billion) deal with the International Monetary Fund and facing the prospect of a US$16 billion legal bill after a US court ruling related to the state takeover of energy firm YPF a decade ago.
That’s playing into a race towards presidential elections next month, with radical libertarian Javier Milei the shock frontrunner ahead of establishment candidates economy minister Sergio Massa and conservative Patricia Bullrich.
And inflation itself could still get worse amid the election uncertainty, which has revived memories of hyperinflation from the 1980s among those who lived through it.
“Some estimate say it could accelerate to 180%, which is why we are talking about record inflation levels,” said local economic analyst Damian Di Pace, adding that other nations in the region were meanwhile seeing inflation cool.
“While the rest of the Latin American countries have single-digit inflation, Argentina is already in triple digits.”
Business owners, who themselves face a tricky cycle of wholesale prices rising before they have shipped merchandise and been able to restock, are also suffering from product shortages due to the uncertainty of inflation. – Reuters
