A woman walks between signs showing the price of food on a street in Buenos Aires, Thursday © Luis Robayo / AFP / Getty Images
Argentina closed the year with annual inflation accelerating to 95 percent, bringing the South American country narrowly outside the top five triple-digit inflation countries globally.
Prices rose by 5.1 percent in December, rising slightly after three consecutive months of decline and bringing the 12-month figure to 94.8 percent, according to government statistics Indec. This is the highest level since 1991, when the country emerged from a hyperinflationary crisis.
Soaring prices have been largely attributed to a bout of central bank money-printing, as well as Russia’s war in Ukraine.
Argentina is among the six countries that experienced the highest rate last year, but is behind Zimbabwe, Lebanon, Venezuela, Syria and Sudan, which experienced triple-digit inflation last year.
Argentina’s finance minister, Sergio Massa, attributed the slight decline in December to a price control scheme known as “Fair Prices” or Precios Justos, which temporarily freezes the cost of more than 1,700 items until December 2023. Similar price controls in 2021 failed. limit inflation. The minister added that the monthly price increase could decrease, to 3 percent in April.
Economists expect inflation in Argentina to remain high in 2023 as the country enters a presidential election year and are skeptical about the effectiveness of the latest government measures.
Earlier this week, the World Bank warned that inflation below 90 percent would be a complex challenge in 2023.
Consumer sentiment in Argentina continues to deteriorate. The value of the local peso on the widely used parallel exchange rate has fallen to a historic low against the US dollar as savers fearing a further devaluation turn the peso into more reliable holdings. On Thursday the peso fell to 360 against the dollar.