A woman walks between signs showing food prices on a street in Buenos Aires on Thursday © Luis Robayo/AFP/Getty Images
Argentina ended the year with annual inflation accelerating to 95%, taking the South American country just outside the five countries with triple-digit inflation rates in the world.
Prices rose 5.1% in December, rising slightly after three consecutive months of declines and taking the 12-month figure to 94.8%, according to government statistics agency Indec. It was the highest rate since 1991, when the country was emerging from a crisis of hyperinflation.
The price spike has been widely attributed to a flurry of central bank money printing, as well as Russia’s war in Ukraine.
Argentina is among the six countries that saw the highest rates last year, but trails Zimbabwe, Lebanon, Venezuela, Syria and Sudan, which saw triple-digit inflation last year. last year.
Argentine Finance Minister Sergio Massa attributed the slight decline in December to a price control system known as “Fair Prices” or Precios Justos, which temporarily froze the cost of more than 1,700 goods until in December 2023. Similar price controls introduced in 2021 failed to curb inflation. The minister added that monthly price increases could start to come down to 3% by April.
Economists widely expect inflation in Argentina to remain stubbornly high through 2023 as the country enters a presidential election year and are skeptical of the effectiveness of the latest government measures.
Earlier this week, the World Bank warned that bringing inflation below 90% would be a complex challenge in 2023.
Consumer confidence in Argentina continued to deteriorate. The value of the local peso on the widely used parallel exchange rate has fallen to historic lows against the US dollar as savers fear further devaluation converting their pesos into more reliable assets. On Thursday, the peso fell to 360 against the dollar.