Bus fares in Argentina rise by 40% due to crisis and inflation

Facing inflation of more than 60 percent and a sharp devaluation of the peso against the dollar, socialist-ruled Argentina will adjust public transport fares in Buenos Aires next month. The increases are expected to be 40 percent.

According to local officials, the minimum bus fare is expected to rise from 18 to 25 pesos, lifting the price freeze that has been in place since 2019. Tickets for trains and subways will also be readjusted.

The idea is to reduce public transport subsidies to control the budget deficit. The country is in one of the worst crises in its history, with the prospect of inflation reaching 90% by the end of the year and a rise in the prime rate, which is already above 52%.

The primary deficit reached 755.9 billion pesos (about US$30 billion) in the first half of the year, equivalent to almost 1% of GDP and a 263% increase over the same period last year. At the same time, the dollar rose by 60%.

To lead the country out of the crisis, President Alberto Fernández is relying on the “Great Argentina” plan, which is based on public works, sanitation, and transportation infrastructure. The plan has a budget of more than 835 billion pesos (US$6.5 billion). The project relies on job creation to save the economy.

The resignation of Economy Minister Martín Guzmán this month has not yet brought any signs of relief to the country’s fragile economic situation.

Economist Silvina Batakis, who is linked to Vice President Cristina Kirchner, took office with a mandate to negotiate with the International Monetary Fund (IMF) over Argentina’s US$44 billion debt and present solutions to the crisis.

This week, Batakis met with international creditors and IMF Managing Director Kristalina Georgieva in Washington. The new economy minister has also been in dialogue with the World Bank, which has just announced a US$200 million loan for small and medium-sized Argentine companies. However, the stalemate in the economy continues.

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