Highest value in 33 years
Argentina’s inflation rate shoots to 254 percent
February 15, 2024, 7:25 a.m
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The new President Milei wants to do everything differently in Argentina and transform the state and economy. Economically, his country is off to a bad start in 2024. The already very high inflation rate continues to rise massively and reaches its highest level in decades.
The annual inflation rate in Argentina has risen to 254.2 percent. In January, prices in the South American country hit by a severe economic crisis rose by 20.6 percent, as the national statistics authority Indec announced in Buenos Aires. In particular, the costs for personal care products, transport and communication rose sharply. This means that the year 2024 began in Argentina with the highest inflation rate since the hyperinflation of 1991.
Inflation in Argentina is one of the highest in the world. The second largest economy in South America suffers from a bloated state apparatus, low industrial productivity and a large shadow economy that deprives the state of a lot of tax revenue.
The new ultra-liberal President Javier Milei wants to get Argentina back on track with a radical austerity program. The government sharply devalued the national currency, the peso, and announced cuts to subsidies on gas, water, electricity and public transport, which is likely to further drive up prices.
Parliament slows down Milei’s reforms
However, some of the reform plans for economic deregulation suffered a setback in parliament. At the beginning of February, the House of Representatives voted to send the reform proposal from the plenary session back to the committees. Milei’s party La Libertad Avanza itself had made the corresponding request due to the lack of support from the other parties – shortly before votes on controversial privatizations were due to take place.
On February 2nd, after a marathon debate lasting several days, Parliament voted in principle for Milei’s comprehensive reform package. As a result, debates and votes began on the individual elements and articles of the comprehensive legislative proposal. Controversial issues include, in particular, the transfer of special powers to the government in the event of an economic emergency, the extent of privatization of state-owned companies and deregulation and austerity measures in areas such as the electoral system, pensions, education, culture, criminal and family law.