Argentina Registers 6.6% CPI in February; Inflation Numbers Blast Past 100% YoY for First Time Since the 90s

The National Institute of Statistics and Census of Argentina released February’s numbers for the consumer price index (CPI), registering an increase of 6.6%, a consequence of the rises in prices of food and beverages principally. The number is among the highest in the history of Argentina, reaching more than 100% growth year-on-year (YoY), something that has alarmed local analysts.

Argentina Registers Record CPI Levels in February

The National Institute of Statistics and Census in Argentina released the inflation numbers for February, alarming local analysts. According to the report, February’s monthly CPI reached 6.6%, a higher number than the 6% registered in January. The rise was mostly caused by the increase in prices of food and beverages, which grew by 9.8%, hitting the pockets of Argentines. Inside this sector, meats spearheaded the hike, with prices rising by more than 30% in some cases.

Inflation reached record yearly levels, with prices rising 102.5% YoY, the highest number in more than 30 years. Even with this unprecedented behavior, analysts are predicting a further acceleration for March, which would thwart the expectations of the government of maintaining the CPI under 100% for 2023.

The numbers of Argentina are the second highest in Latam, only trailing behind Venezuela’s year-on-year CPI, which reached 155.8% in October.

Losing the Battle

Local economists have expressed their worries about the acceleration of prices in the country, calling for changes in the economic policies of the government of Alberto Fernandez. The government has been trying to contain inflation by establishing price control mechanisms since last October, but these movements have not achieved the desired goal.

Martin Vauthier, an economist from Anker Latam, a financial counseling group, stated:

A stabilization program is required with a strong fiscal component, an exchange rate consistent with the accumulation of reserves, and a consistent monetary policy that serves to reverse expectations and rebuild the demand for money.

Ecolatina’s Research Chief, Santiago Manoukian, also declared:

The main concern is that the rise was driven by food and beverages, with a greater impact in the consumption basket of the poorest households.

The rise in prices in Argentina is leading some retailers to fix prices in U.S. dollars to avoid constant repricing, a phenomenon that is also common in Venezuela.

On March 4, President Alberto Fernandez communicated the creation of a Latam-wide mechanism to fight inflation. The new mechanism would integrate a clearing system, allowing countries to exchange goods experiencing price hikes for others between Argentina, Brazil, Cuba, Colombia, and Mexico.

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