Argentina's Mileise: Monthly inflation hits 25.5% in December - the highest in the world

[peppertree]

Argentina’s monthly inflation rate reached 25.5% in December 2023, according to the National Institute for Statistics and Census (INDEC).

The figure, which more than doubles November’s rate, is the first to reflect part of President Javier Milei’s administration and last month’s 54% devaluation. The monthly rate, published on Thursday, is the highest since February 1991.

Cumulative inflation for 2023 was 211.4%, the country’s highest annual price hike since 1990. It was also the highest 2023 inflation rate in Latin America, surpassing Venezuela’s 193%.

The economic sector that saw the biggest increase was “other goods and services” which includes toiletries and personal care services (32.7%).

It was closely followed by a 32.6% increase in health, driven by price hikes in medicines and health insurance - prompting many middle-class households to drop private insurance, and seek care in already overburdened public hospitals.

Transportation went up by 31.7% due to increases in gasoline - which jumped 80% after Milei's decree deregulating the fuel market.

The end of price agreements also contributed to higher food prices.

Food and non-alcoholic beverages jumped 29.7%, driven by increases in meat and derivatives, lemons, bread, flour, vegetable oil, rice and cereals - all subject to price and supply pressures from the agro-export sector.

A report by the Center of Argentine Economic Politics (CEPA) said that the 118% exchange rate jump was the main reason behind December’s inflation rate. The report added that some prices had, moreover, been adjusted to the parallel dollar exchange rate (currently 34% above the official rate).

At: https://buenosairesherald.com/economics/mileis-first-inflation-rate-hits-25-5

A Buenos Aires senior citizen leaves a typical neighborhood greengrocer recently.

Produce prices per kilo reflect an affordability crisis for even basic food items - considering that minimum wages were left unchanged at 156,000 pesos, and basic pensions were actually slashed by 22,000 pesos to 160,000.

Buoyed by a record devaluation and price deregulation, December's inflation rate in Argentina (25.5%) was the highest on earth for that month - dwarfing the 4.7% registered in Zimbabwe.

[Judi Lynn]

1. Shocking! His beginning is as horrendous as one would have feared. Far less disastrous results have generated riots.

I would wonder if he, with Macri's backing, is already prepared to send tanks back into the street to start re-suppressing dissent, ready to launch another Dirty Waro any time it seems possible.

Has anyone ever made a worse beginning, peppertree?

Can't imagine how those who were suffering already can survive this.

[peppertree]

2. Sad but true, Judi. And riots may indeed break out within a few months.

The fat little bastard even boasted that "See? They've run out of pesos!"

This is Nero-level incompetence and insanity.

To him, impoverishing his own, already-struggling people (whom he seems to hate - no doubt over his nationalist father's being so brutal to him as a child) is a "small price to pay" to facilitate his pipe dream of dollarizing the country.

The idea being, that the only way he can compensate the 50 trillion pesos in circulation (deposits and cash) is by forcing people and businesses to burn through them (!).

Big Oil and the Fortune 500, meanwhile, are rubbing their hands at the prospect of being able to buy up state assets at fire-sale prices - which, of course, is easiest if the country is destitute.

The whole fracas will ultimately go down as just another calamity Argentina will have to recover from.

Always making up for lost time (or trying to), rather than actually growing and developing. And this time, they have no one to blame but themselves.

Thanks as always for your observations, and for your very nice words in Malaise's post earlier. You're very kind.

Stay warm!