The annual inflation rate in Argentina has dramatically risen, now standing at a staggering 254 percent. The South American nation, already grappling with a harsh economic crisis, saw a 20.6 percent surge in prices this January. The national statistics agency, Indec, released these figures in an announcement made in Buenos Aires on Wednesday.
The significant rise in inflation is primarily attributed to the increased cost of personal care products, transportation, and communication. This rise in prices has resulted in Argentina starting 2024 with the highest rate of inflation since the hyperinflation crisis of 1991.
Argentina’s inflation rate is among the highest globally. The country, being South America’s second-largest economy, is plagued by an overgrown state machinery, reduced industrial productivity, and a vast shadow economy. The latter significantly deprives the state of substantial tax revenue.
Radical austerity program planned
The newly elected ultra-liberal President, Javier Milei, is determined to rectify Argentina’s economic trajectory through the implementation of a radical austerity program. This plan includes drastic measures such as the substantial devaluation of the local currency, the peso.
Additionally, the government has announced plans to cut subsidies on various essential utilities, including gas, water, electricity, and public transport. These cuts are likely to further provoke a rise in prices, adding to the inflationary pressures already faced by the nation.
