Buenos Aires (awp/afp) – Argentina experienced 7% inflation in August, down slightly from 7.4% in July, but which brings the rise in the cost of living to 56.4% over the first eight months of 2022, undermining the new Minister of the Economy’s inflationary control objective in the short term.
The August index released Thursday by the National Institute of Statistics (Indec) is the second largest monthly increase this year, and cumulative inflation over one year now stands at 78.5%, one of the highest in the world.
Argentina, Latin America’s third-largest economy, has been plagued by chronic double-digit annual inflation for two decades. In 2021, the price increase had reached 50.9%. In its latest monthly report on market expectations in early September, the central bank predicted inflation of 95% for 2022.
According to the Indec, the clothing and footwear (+9.9%), miscellaneous goods and services (+8.7%) and household equipment and maintenance (+8.4%) sectors in August pulled prices up. the top.
A particularly feverish July in Argentina saw two changes of Minister of the Economy, after the surprise resignation of Martin Guzman, craftsman in early 2022 of the agreement with the International Monetary Fund (IMF) on the refinancing of Argentine debt.
Sergio Massa, reputed to be more “political” than really technical, inherited a “super-ministry” of the Economy at the end of July, with the mission of reassuring the markets. He has just spent a week in Washington for meetings with the teams of the IMF and its managing director Kristalina Georgieva.
Ms. Georgieva congratulated him in a press release for his “strong decisions taken in order to stabilize the markets”, and his “strong commitment” to respect the objectives set out in the framework of the Fund’s aid plan for the Argentine economy. This plan provides for a gradual control of the Argentine public deficit, tending towards equilibrium in 2025.
The impact of Mr. Massa’s recent measures – raising interest rates, cutting energy and public transport subsidies – is still struggling to impact on inflation, even if the markets seem to be giving the peso some respite, which trades these days at 275 pesos for one dollar at the parallel rate (149 pesos at the official rate), against more than 300 at the end of July.
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