According to a report on the Spanish "El Pais" website on August 12, inflation is raging in Argentina. According to data released by Argentina’s National Institute of Statistics and Census on the 11th, Argentina’s inflation in July increased by 7.4% month-on-month . This figure is the highest monthly month-on-month increase since April 2002. Argentina's inflation in July increased by 71% year-on-year, and the cumulative inflation since January this year rose to 46.2%. Unofficial expectations for inflation in 2022 have reached 95% to 112%. The government of Alberto Fernández had already expected a surge in inflation, a product of the instability caused by the premature resignation of Economy Minister Martín Guzman on July 2 this year. The deterioration of the economic situation has not stopped.
A vendor sells items at a market on the outskirts of Buenos Aires, Argentina. ( Associated Press )
reported that hours before the July inflation data was released, the government had prepared for what it expected to be very bad news. Government spokesperson Gabriela Ceruti complained that in the days following Guzmán's resignation, "speculation" sought to "create uncertainty and trigger a devaluation of the currency." In the first two weeks of July, the Argentine peso lost 40% of its value against the U.S. dollar in the informal market. At the same time, food prices soared and the central bank's drain on dollar reserves accelerated. In those turbulent days, it was common for merchants to suspend sales of some products because they had no pricing reference. Escalating inflation cost Guzman's successor Silvina Patakis her job as economy minister in just over 20 days.
President Fernández and his Vice President Cristina then opened the doors of the government to House Speaker Massa, appointing him as the "super minister" of the joint economic department created by the merger of multiple departments.
reported that the entry of a significant political figure into the cabinet gave rise to what Seruti said in his statement on Thursday "a sense of stability." The spokesman emphasized that the dollar's exchange rate against the peso fell by 15%, and Argentina's sovereign debt rose by 25%. This week, Massa also managed to roll over 2 trillion pesos (approximately $15 billion) of national debt maturing from August to September beyond 2023. The ultimate goal is to avoid devaluation of the national currency. Argentina’s central bank tried unsuccessfully to stem dollar outflows: in the first week of August, it sold more than $800 million. One of the issues to be addressed is the fiscal deficit. Massa pledged to reduce the fiscal deficit to 2.5% of gross domestic product (GDP) this year, in line with the figure agreed by Argentina and the International Monetary Fund in the refinancing plan signed in January.
Source: Reference News Network
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