Argentina is expected to reach the highest monthly inflation since 1990 in December

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The increase in prices was driven by the strong devaluation of the peso following measures taken by the country’s new president, Javier Milei. Inflation in December in Argentina is expected to be the highest since 1990. Reuters Argentina’s monthly inflation is expected to rise to 28% in December, according to projections by experts consulted by Reuters. If confirmed, this will be the highest rate in a month since the beginning of 1990. The result considers the median forecasts of 20 local and foreign analysts. The analysis takes place amid the challenging scenario that the country faces, with annual inflation expected to reach 200%, one of the highest in the world. The spike in inflation is related to the measures announced in December by the country’s new president, Javier Milei (see below). Among them is the strong devaluation of the peso, which increased prices. Labor reform, privatizations, rents: the main points of Milei’s decree The ultra-liberal president — who took office last month amid voters’ repulsion towards the political class — promoted a devaluation of more than 50% of the Argentine currency, considered weakened and artificially strong. This triggered a wave of repressed inflation, with a sharp adjustment in the prices of food, clothing and transport, which had been suppressed until then. One of the objectives of Milei’s measure is to reduce the difference between the official exchange rate and the parallel rates widely used in the country. “The acceleration was clearly driven by price accommodation that was artificially delayed,” Eugenio Mari, chief economist at Fundación Libertad y Progreso, explained to Reuters. “The main factor was the wholesale exchange rate. This drove up the prices of tradable goods, especially food and beverages, which increased by around 35% per month.” Projections from analysts interviewed by Reuters range from 16.9% to a peak of 31.5% for the month. The country’s official statistics agency, Indec, will release the official data on Thursday (11). President Javier Milei himself acknowledged that inflation will probably be around 30% in December — and that the result could be worse. Galloping inflation has been rising in recent years in Argentina due to factors such as deep fiscal deficits, low confidence in the peso and the printing of money to finance the government. The result is the country’s worst economic crisis in two decades. New economic measures announced by Milei generate controversy ‘Decree’ by Javier Milei The new president of Argentina announced on December 20 the Decree of Necessity and Urgency (DNU), a measure to reform or revoke more than 350 regulations. Among other points, the decree deregulated satellite internet service and private medicine, made the labor market more flexible and revoked a series of national laws. The changes also include the conversion of several state-owned companies into public limited companies, facilitating the privatization process of these institutions. The measure was questioned. Last Thursday (4), the Argentine Labor Court granted a precautionary measure to suspend the labor reform announced by Milei. A day earlier, the Judiciary had already suspended the reform with a first precautionary measure. The two decisions were made by the same judges, but they originated from different actions, each filed by a different union center. The most recent decision determines that it is necessary to issue an injunction until there is a definitive decision in the case because there is a great risk of social conflict and the possibility of violence. Among the measures announced by Milei are: Repeal of the Rent Law. Repeal of the Supply Law. Repeal of the Gondola Law. Repeal of the National Procurement Law. Revocation of the Price Observatory of the Ministry of Economy. Repeal of the Industrial Promotion Law. Repeal of the Trade Promotion Law. Revocation of regulations that prevent the privatization of public companies. Repeal of the state companies regime. Transformation of all State companies into public limited companies for their subsequent privatization. Modernization of the work regime to facilitate the job generation process. Reform of the Customs Code to facilitate international trade. Repeal of the Land Law. Modification of the Fire Fighting Law. Revocation of sugar mills’ production obligations. Release of the legal regime applicable to the wine sector. Revocation of the national mining trading system and the Mining Information Bank. Authorization to transfer the total or partial share package of Argentine airlines. Implementation of the open skies policy. Modification of the Civil and Commercial Code to reinforce the principle of contractual freedom between the parties. Modification of the Civil and Commercial Code to ensure that contractual obligations in foreign currency are paid in the agreed currency. Modification of the regulatory framework for prepaid medicines and social works. Elimination of pricing restrictions in the prepaid industry. Incorporation of prepaid medicine companies into the social works regime. Establishment of electronic medical prescriptions. Modifications to the regime for pharmaceutical companies to promote competition and reduce costs. Modification of the Corporation Law so that football clubs can become corporations. Deregulation of satellite Internet services. Deregulation of the tourism sector. Incorporation of digital tools for automotive registration procedures.

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