BARRIO – Argentina’s annual inflation rate soared past 70 percent in July—the highest level in three decades—according to data released by the Argentine government last week, and it could hit 90 percent by the end of the year.
Argentina’s ongoing battle with inflation dates back to the 1980s, or even earlier. But the COVID-19 pandemic, together with Russia’s war in Ukraine, shrinking global food supplies, and tighter energy markets, has sent shock waves through an already battered economy. Nearly 4 in 10 Argentines currently live below the poverty line. The economy—which is highly dollarized given the diminishing value of the Argentine peso—is running through billions of dollars’ worth of foreign reserves on a weekly basis. Some Argentines have resorted to trading milk for diapers. Others complain that the frequent changes in prices have left them guessing the cost of their newspaper or bag of rice—often they only find out when they get to the cashier.
Following the 2001 crisis, many Argentines blamed, and still blame, the IMF for imposing harsh conditions that worsened the country’s already dire economic situation. Last year, Argentine President Alberto Fernández criticized the IMF’s 2018 loan to Argentina, the largest loan in IMF’s history, as being “toxic and irresponsible.”
Let’s hope this mess gets better soon.