worst monthly inflation in 32 years (12.4% in August)

2023-09-13 20:13:00

Even Argentina, where rampant inflation has spoiled daily life for years, had not seen this for decades. In August, the monthly (not annual!) inflation rate rose to 12.4% in August compared to July. Over one year, prices are even… 124.4% higher. These figures appear to be the aftermath of a devaluation carried out last month.

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This is the worst monthly index in 32 years. The inflationary shadow, more worrying than ever, will weigh on the campaign for the October elections. This is the first time since April 2002 that the monthly inflation rate has exceeded 10%.

Catastrophic financial and agricultural situation

The monthly index for August, published Wednesday by the National Institute of Statistics (Indec), is therefore twice as high compared to that recorded in July (+6.2%). Less than two months before the Argentine presidential elections (October 22), Sergio Massa, candidate and Minister of the Economy, presented measures at the end of August which should give a boost to the country’s activity undermined by galloping inflation. His plan notably proposes tax boosts, subsidized loans to workers and the granting of vouchers to retirees and recipients of food aid.

« Argentina has a loan contracted with the Fund (International Monetary, IMF) since 2018 which has forced in recent days a devaluation of our currency and, in addition, a drought, the worst in our history, which has harmed our reserves and to our accounts, but also affected the financial situation of many families “, explained Sergio Massa.

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The government estimates the losses caused by the 2023 drought at $20 billion, almost 3% of the national GDP. Despite social assistance, around 40% of Argentina’s 46 million people live in poverty. Scenes of looting took place this summer in several cities across the country, with the government calling them “ of criminal acts, to generate confusion and conflict ».