Inflation reaches 55.1% in Argentina and almost half the population goes hungry
The specter of the "corralito", the great currency and economic crisis that shook Argentina at the beginning of the century, reappears.
By Andrew
Argentina is that country where inflation is no longer a mere monetary problem. It is an integral part of the national culture.
Buenos Aires has lived with double or even triple digit inflation rates for almost a century. So much so that the average inflation in Argentina between 1944 and 2022 was 191.73%.
An uncontrolled price spike that has devastated the Argentine economy, turning one of the richest countries in the world into a place where 44% of the population lives below the poverty line.
This time, however, inflation is beating any forecast.
It is starting to skyrocket. Or, rather, galloping.
Galloping Inflation in Argentina
Prices in Argentina rose 6.7% in March, reaching an annual average of 55.1%.
A rise that had not occurred since 2002, the year after the debacle caused by the Buenos Aires government's default on its public debt bond holders.
The specter of the "corralito", the great exchange and economic crisis that shook the neighboring country, devastating the savings of those who invested in the local "Treasury Direct", is again looming.
The increase in prices has mainly affected the food sector, with a 7.2% rise. And this is reflected in basic consumer goods.
Direct consequence: official data show that almost half of Argentinians go hungry. And another 25% struggle to make ends meet.
The peso, the local currency, is constantly devaluing.
Popular protests are growing. Opposition unions are back on the streets, occupying for hours the famous Calle 9 de Julio, the main avenue that runs through downtown Buenos Aires, and divides the Casa Rosada, seat of the Presidency of the Republic, from the National Congress palace.
Economic Crisis and Political Crisis
Besides being plagued by an endemic economic crisis, Argentina has to deal with a political crisis.
The government is divided. Since last November, when the ruling left registered a heavy defeat in the regional elections, tensions between the president, Alberto Fernández, and his vice-president, Cristina Kirchner, have not stopped rising.
According to EXAME Invest's sources in Buenos Aires, the two have not spoken for months.
And Fernández already considers Kirchner his main internal enemy.
This is because ex-president does not miss an occasion to point out her disappointment with her ally.
She doesn't hide her regret for having offered her former cabinet chief the possibility of becoming President of the Republic.
Something unthinkable until a few weeks before the election.
For her, if Fernández is in charge of the country, it is only his merit.
Therefore, Cristina throws gasoline on the discontent of the Peronist base, and stimulates more protests with inflammatory speeches.
Runaway Inflation Worsens the Scenario
The distance between the two has become sidereal because of runaway inflation.
The president does not consider himself a puppet of anyone, and claims his action. But he asks the rival wing of the Peronists not to get in the way.
But it is precisely this line that divides the two rivals in charge of Argentina.
The economists linked to Kichrnerism are convinced that they are facing a so-called "distributive supply".
An extravagant economic sub-theory, unknown worldwide, whose popularity is basically limited to a single country: Argentina itself.
The end point of this intellectual contortion is the same goal as always: to control prices by government decree.
The disastrous economic recipe that has already left Argentina's economy in tatters in the last decades. But which is regularly re-presented by the Kirchnerist "economists".