Unabated interannual inflation in Argentina reached 104.3% in March

Inflation in Argentina continues to be unrelenting and reached 104.3% in March in the 12 months, 1.8 percentage points above February’s interannual measurement, the National Institute of Statistics and Censuses (Indec) informed on Friday (14).

In the third month of the year, inflation reached 7.7%, accelerating from February’s 6.6% rate and above private market expectations (7%) in the latest survey by the country’s Central Bank.

“Inflationary processes tend to have an exponential trend when there is no stabilization plan, even more so if in the middle there is an electoral cycle like the one that is approaching in Argentina,” explained economist Diego Giacomini, director of the consulting firm Economía y Ética, referring to the uncertainty generated by the October presidential election, which includes a primary process in August.

Goods last month were up 7.8% compared to February, while services increased 7.4%, figures totaling 105.7% and 100.2%, respectively, considering the accumulated over 12 months.

Among the increases recorded in March were those in the education sectors (29.1% monthly and 96% interannual) due to the beginning of the school year, clothing and footwear (9.4% and 118.8%, respectively), coinciding with the change of season, and food and non-alcoholic beverages (9.3% and 106.6%), due to the increase in the price of meat, dairy products, and eggs, according to Indec.

“We know, it hurts us, it worries us, it affects daily life and the whole family,” wrote presidential spokesperson Gabriela Cerruti on her Twitter account.

“The number we see today represents the worst moment of the impact of the war on international prices and the worst drought in the country’s history,” she argued, claiming that “this was the worst moment and that a downward trend began.”

Consumer prices had accumulated a high of 94.8% in 2022, a sharp acceleration compared to 50.9% in 2021.

According to the International Monetary Fund (IMF), Argentina’s inflationary pressures will remain high.

South America ranked second among the highest projected price increases in the institution’s latest World Economic Outlook report, with inflation of 98.6% in 2023, second only to Venezuela, which has a projection of 400%.

“We expect inflation to remain high and at very high levels. Having an adjusted monetary policy and a fiscal policy that is in line with what is in the program supported by the fund would be particularly important,” Petya Koeva, deputy director of the IMF’s research department, said this week.

The latest private-sector forecast commissioned monthly by Argentina’s central bank said annual inflation in the country will be 110% by the end of this year and 90% by 2024.