January 27, 2023

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A woman walks among signs indicating food prices on a street in Buenos Aires on Thursday. © Luis Robayo / AFP / Getty Images

Argentina ended the year with annual inflation accelerating to 95 percent, putting the South American country outside the top five triple-digit inflation nations globally.

Prices rose 5.1 percent in December, picking up slightly after three straight months of decline and reaching the 12-month low of 94.8 percent, according to government statistics agency Indec. This was the highest rate since 1991, when the country was emerging from a crisis of hyperinflation.

The price hike has been largely attributed to the Central Bank’s bout of money printing, as well as Russia’s war in Ukraine.

Argentina is among the six countries with the highest rates last year, but it is behind Zimbabwe, Lebanon, Venezuela, Syria and Sudan, which experienced triple-digit inflation last year.

Argentina’s Finance Minister, Sergio Massa, attributed the modest decline in December to a price-control scheme known as “fair prices” or precios justos, which temporarily froze the cost of more than 1,700 commodities until December 2023. Similar price controls introduced in 2021 failed to rein in inflation. The minister added that monthly price increases may start to fall to 3 percent by April.

Economists widely expect Argentina’s inflation to remain stubbornly high throughout 2023 as the country enters a presidential election year and question the effectiveness of recent government measures.

Earlier this week, the World Bank warned that bringing inflation below 90 percent will be a complex challenge in 2023.

Consumer confidence in Argentina continued to deteriorate. The value of the local peso on the widely used parallel exchange rate has fallen to historic lows against the US dollar, as savers fear further devaluation could turn the peso into trustworthy holdings. On Thursday, the peso fell to 360 against the dollar.

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