BUENOS AIRES, Sept 13 (Reuters) – Argentina’s annual inflation rate rose to 124.4% in August, the highest level since 1991, triggering a painful cost of living crisis in the South American country.
Hard-hit by higher-than-expected price increases, shoppers are running sporadic discounts to lure shoppers, with price hikes resulting in large store-to-store differences and people looking for bargains and cheaper options. I am forced to struggle every day to find it.
Monthly inflation in August was 12.4%, an impressive annual figure for most countries around the world, but poverty levels are above 40%, ahead of elections in October. has fueled the anger of traditional political elites.
“It’s very difficult. Every day the prices are getting a little higher. It’s always a race against time, searching and searching,” Laura Celis said while shopping for groceries in Tapiares, a suburb of Buenos Aires. Ta. “You buy something cheap in one place, then go to the next place and buy something else.”
Her husband, Fernando Cabrera, 59, was running the totals on a calculator to compare the prices of fruits and vegetables.
“This way we are trying to beat inflation, or at least compete with it a little bit,” he added.
A central bank analyst poll released in response to the data found that year-end inflation is expected to exceed 169%, up sharply from last month’s forecast of 141%. The monthly inflation rate was expected to be 12% in September and 9.1% in October.
Argentina is stuck in a cycle of economic crises, with a significant loss of confidence in the peso resulting in an unstoppable depreciation of the peso, triple-digit inflation, negative central bank reserves, and continued economic stagnation due to drought hitting agriculture. ing.
The country is also struggling to regain a $44 billion agreement with the International Monetary Fund (IMF) and $16 billion following a U.S. court ruling related to the state-run takeover of energy company YPF a decade ago. facing the prospect of litigation costs.
“People are angry”
This has implications for the race for next month’s presidential election, with radical liberal Javier Millei in a shock victory over establishment candidates Economy Minister Sergio Massa and conservative Patricia Bullrich. He is a strong candidate.
And inflation itself is likely to worsen amid election uncertainty, reviving memories of the hyperinflation of the 1980s among those who lived through that era.
“Inflation could accelerate to 180% by some estimates. That’s why we’re talking about record inflation levels,” local economic analyst Damien Di Pace said. He added that other countries in the region see inflation calming down.
“Inflation rates in other Latin American countries are in the single digits, but Argentina has already reached triple digits.”
Massa, who has cut taxes to reduce the impact of inflation on workers, criticized the IMF late Wednesday, saying August had been the “toughest” month.
“We knew that the 20% devaluation of the currency imposed by the IMF would hurt the pockets of every Argentine household,” he said.
Business owners themselves face difficult cycles in which wholesale prices increase before they can ship and restock goods, and they also struggle with product shortages due to inflation uncertainty.
Marcelo Capobianco, 53, a butcher, is considering moving abroad because he fears having to close his business. He lists the price of his meat in dollars. The dollar is used by many as a haven from the continued devaluation of the peso.
“It’s dramatic. I don’t know how I’m going to pay this month’s rent and electricity bill,” Capobianco said at his butcher shop in the Buenos Aires suburb of Olivos. “People are angry because they can’t afford a kilo of meat, and they have every right to do so.”
“We are already considering what to do because, in fact, if this situation continues, I think we will have to close the shop,” he said.
Reporting by Miguel Lo Bianco, Jorge Otaola, Claudia Martini, Walter Bianchi and Hernan Nessi. Written by Lucila Sigal.Editing: Nicolas Misculin, Adam Jourdan, Chizu Nomiyama, Sandra Marat
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