Argentina inflation exceeds minister’s forecast, reaching 95% annually

• The rate of growing consumer prices in December was higher.
• The SA nation is struggling with one of the highest inflation rates in the world.
• This is because rising costs impede economic growth and reduce wages and purchasing power.

According to official figures issued on Thursday, the monthly inflation rate of Argentina was 5.1% in December, and the country’s annual inflation rate for the preceding 12 months was almost 95%.

The rate of growing consumer prices in December was higher than the economy minister had anticipated but a little lower than analyst projections.

According to the poll of analysts, economists predicted a rise of 5.2% in December, while the government hoped the price increase would not exceed 5% in the final month of 2022.

According to the national statistics office INDEC, the South American nation is struggling with one of the highest inflation rates in the world, which in the past year reached 94.8%. This is because rising costs impede economic growth and reduce wages and purchasing power.

After one of the world’s most aggressive tightening cycles, Argentina’s central bank extended a break on hikes by holding its benchmark interest rate steady at 75% on Thursday due to slowing inflation.

In a recent interview, Economy Minister Sergio Massa predicted that December’s monthly inflation wouldn’t go above 5% and that the government hopes to see it fall to about 3% in April.

Lucio Garay Mendez, an economist at consultancy EcoGo, noted that while meat price increases moderated in December, prices for fruits and vegetables continued to rise.

At the beginning of 2023, economists anticipate that monthly inflation would be around 5%, driven by a downturn in the economy and retail price caps.

Isaias Marini, an economist with the consultancy Econviews, stated that the dangers are still considerable and that a further increase in parallel (market) dollars could result in increased inflation.

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