Inflation in Argentina is getting out of control. The current rate of 52% – primarily fueled by the Russia-Ukraine conflict – needs to be addressed. President Alberto Fernandez wants governments officials to use “any means necessary” to get things under control again, although that may prove challenging.
Inflation Hits Argentina Hard
Financial inequality and long-term concerns are prevalent worldwide. Struggling nations pre-COVID-19 will only have a harder time in the years ahead. Argentina is a country where inflation has always been a problem, and things only grow progressively worse. Today, inflation hit peak levels of 52% and shows no signs of slowing down anytime soon. prices continue to accelerate in the country for the third straight month.
Export taxes in Argentina surpassed 30% for both soy meal and oil. That is another 2% increase compared to last month. However, president Fernande wants his government to pursue even more aggressive strategies to get inflation under control. It is unclear what more can be done, especially as Argentina approved a $45 billion agreement with the IMF.
For now, the IMF deal will require Argentina to hit an inflation target between 38% and 48% for 2022. Those rates are still absurdly high, yet would offer a steep improvement compared to how things are going. The ongoing Russia-Ukraine conflict will not help matters, although it is not the root of the problem. An end to electric bill subsidies, more controlled peso devaluations, and wage negotiations weigh heavily n the nation.
Additionally, the recent 10% hike on fuel prices will ensure inflation remains present. At this rate, Argentina may hit an annual inflation rate of 62%. It will be interesting to see how the government will try to prevent that from happening.