Argentina: Inflation slows to 11% in March – 04/12/2024 – Market

Although in more moderate figures than those claimed by the Argentine government, inflation slowed down for the third consecutive month in the country under Javier Milei and stood at 11% in March.

The numbers were released by the Argentine statistics institute, Indec, this Friday afternoon (12). The index was highly anticipated as it acts as one of the thermometers of the practical effects of the austerity measures of the current administration in Casa Rosada.

Even so, accumulated inflation over the last 12 months reached a peak of 287.9%, compared to 276.2% in the previous month. These are the highest interannual indicators in more than three decades in the country.

Milei took over the country with monthly inflation that in December was 25.5%. Since then, the index has fallen to 20.6% (January), 13.2% (February) and 11% (March).

It was in the education sector that there was the most significant inflation, with 52.7% per month, which Indec attributes especially to the increase in monthly fees at the beginning of the 2024 school year.

Next is communication (15.9%), due to the increase in the prices of telephone and internet services, and those of water, electricity and gas (13.3%), notably due to the increase in electricity. A change in electricity tariffs last month heralded average increases of up to 300%.

Even though the country’s chronic problem is becoming more pronounced, the population feels the accelerated loss of purchasing power and the increase in poverty on a daily basis, currently at 57%, a level only observed 20 years ago.

Public incentives were cut, and price controls so that residents felt less of an impact when shopping were abandoned.

Another index also released this week helps to read the scenario. The updating of wages in the formal market in Argentina, whether in the public or private sector, lost out in the face of inflation.

Figures recently published by the Social Security Secretariat show that on average formal salaries increased by 11.5% in February, compared to inflation of 13.2% in that same month.

Speaking at Casa Rosada this Thursday (11), the day before the release of the March data, Milei’s spokesman, fellow economist Manuel Adorni, said that “the country’s inflation rates are absolutely unacceptable for a normal country or to a 21st century country”.

“The world already solved the problem of inflation 50 years ago; the only ones who did not adapt to the evidence were the Argentines”, he continued. “But we are not ‘monetary arsonists’ like the last governments have been.”

He said that the end of inflation will soon be a reality in the country. “When? Of course we don’t know, because we don’t have a crystal ball, but we will achieve that with the path we are following.”

Over the past few weeks, the economy minister has even stated that monthly inflation in March would be 10%. Consultants and economists predicted that the figure could be slightly above the 11% recorded by Indec.

In another update, this week the Argentine Central Bank once again mentioned “a promising macroeconomic scenario” and reduced the annual interest rate from 80% to 70%.