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Wednesday, May 29, 2024

Argentina. Inflation at 109 percent. It could be even worse

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In Argentina, plunged into a severe economic crisis, the annual inflation rate reached 109 percent, the country’s statistical office reported on Friday. According to figures released last week by the World Bank, the South American country is the second fastest growing food price, with an annualized rate of 107 percent.

Reuters points out that the spike in prices has left one in four people living in poverty in a country that has been battling high inflationdebt and currency crises.

Poor economic situation Argentina has been exacerbated by the severe drought since last year, which has reduced exports of soybeans, corn and wheat, depleted foreign exchange reserves and made it more difficult for the government to combat currency depreciation.

A report by the Center for Argentine Recovery at the University of Buenos Aires found that if the April-March food price trend continues, annual food inflation could reach 197 percent.

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Government actions

The government of President Alberto Fernandez, which announced that it was withdrawing from the elections scheduled for October, announced “intervention in the exchange market” and a number of other measures aimed at curbing the devaluation Argentine peso. Among them, assistance for small and medium-sized enterprises in the form of tax creditsthe elimination of certain duties in order to lower import costs and make them more competitive.

The latest economic and social improvement project announced by the government of President Fernandez consists in increasing the role of the partially state-controlled so-called Central Market as a direct importer of food products in order to lower the retail prices of food products – including fresh fruit, vegetables and meat.

Unemployment and poverty

About six million Argentines under the age of 15 currently live in poverty.

The effects of galloping high prices in the country are becoming more and more drastic. The Catholic University of Argentina (UCA), which enjoys high academic prestige throughout Latin America, writes in its analysis of the impact of the crisis released these days: “Although the government claims that employment levels and the situation of workers have improved in recent years, the reality seems to be quite different: almost half of the employed who have not completed secondary education live in poverty, in poor housing conditions, are hired for short periods, poorly paid and often lose their jobs.”

UCA analysts predict that as a result of galloping inflation and the deteriorating economic situation, “there will also be a rapid increase in unemployment among the Argentine middle class.”

According to the authors of the latest report by the UCA Social Debt Observatory, “we have been witnessing the degradation of human labor in Argentina for several years.”

Main photo source: Guaxini / Shutterstock.com

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