BUENOS AIRES, Argentina (AP) — A closely watched inflation indicator is Argentina The national statistics institute said on Friday that the price index rose slightly in June, breaking months of a declining trend, better than President Javier Milley’s Liberal government had hoped.
Argentina’s consumer price index rose 4.6% in June, up slightly from 4.2% in May, ending a five-month streak of increases. Inflation is calming down Experts blame the recession on a worsening situation brought on by Milley’s tough austerity measures, with the International Monetary Fund predicting economic growth will shrink by 2.8 percent this year.
President Milley has touted the fall in prices in recent months as a victory in the fight against Argentina’s worst economic crisis in more than two decades.
After Millay took office in DecemberIn 2000, monthly inflation peaked at 25 percent, but the subsequent declines in prices have not provided much relief to ordinary Argentines as Millay pushed through radical economic reforms. Cutting heavy energy subsidiesAbolish price controls, Devaluation of the Argentine Peso.
“The government lives in a world where the numbers say the economy is doing well, but it’s an illusion,” said José Rafael, 34, a taxi driver in Buenos Aires. “In the real world, in this economy it’s really hard to feed my son.”
According to a government report on Friday Argentina annual inflation rate It has slowed slightly to just over 271%, but it is still one of the highest rates in the world.
The statistics institute said much of June’s inflation spike was due to higher electricity and gas prices, with Argentines reporting shockingly high utility bills after years of paying heavy subsidies under left-leaning governments.
In contrast to Millais’s program, The Peron government To fix prices and finance huge deficits, the government printed billions of dollars’ worth of pesos, causing chronically high inflation.
Argentina’s Energy Ministry reported in June that under Milley’s administration, low-income households, who previously paid just 5% of the effective electricity bill, now pay a third, and middle-income households pay at least half, as subsidies were eliminated.
The government has imposed a cap on the amount of electricity consumption that is eligible for subsidies, putting pressure on households. Cold front hits Argentina During the Southern Hemisphere winter.
The report said that in the first five months of 2024, the cost of living in the country rose by about 80% compared to the same period last year. Prices in shops and restaurants in Buenos Aires have reached levels comparable to those in the United States, even though the country offers only a fraction of American wages.
In another warning sign, the peso hit another record low against the dollar on Friday, hitting 1,500 pesos on the black market, and stalled out again this week after remaining stable in the first few months of the year.
The currency’s freefall means the gap between the closely watched black market rate and the official exchange rate – currently 919 pesos to the dollar – has widened to more than 60 percent, complicating Mr Milley’s goal of eventually lifting Argentina’s strict currency controls to restore investor confidence.
Milley wants the IMF to step in with new loans to help Argentina, which is already saddled with a massive $44 billion in debt, to support his plans to lift capital controls that have severely distorted the Argentine economy.
But with uncertainty remaining about the future of Milley’s economic policies, the IMF on Thursday dampened hopes for a new agreement.
“Staff will be discussing possible new arrangements, as they do with other IMF member countries,” IMF spokeswoman Julie Kozak told reporters when asked about the status of the negotiations. “At this stage, there is no specific timeline for discussions.”
