BUENOS AIRES—Argentina registered inflation of 94.8 percent in 2022, its highest annual figure since 1991, the Indec national statistics institute said on Thursday.
Latin America’s third-largest economy has one of the highest inflation rates in the world. But December’s monthly figure of 5.1 percent continued a general downward trend since a peak of 7.4 percent in July.
The annual figure, nonetheless, was a huge jump on the 50.9 percent inflation from 2021.
The government has set a 2023 inflation target of 60 percent.
For most Argentines, going to the supermarket is a disheartening experience.
“You stand in front of the shelves and analyze prices as if you were picking out jewelry,” said Julian Rattano, 66, a retired chemist.
Prices for daily staples rose monthly, even weekly, last year. A liter of milk rose 320 percent in 2022 while cooking oil shot up 456 percent and a kilo of sugar soared 490 percent, the Abeceb consultancy says.
Price rises were steepest in clothing and footwear, at more than 120 percent, and hotels and restaurants, where they jumped a little under 109 percent.
It was bad news for the government just nine months out from a general election.
These are the worst yearly figures since Argentina recorded an inflation rate of more than 171 percent in 1991, during the presidency of Carlos Menem.
The two previous years had seen hyperinflation at more than 2,000 percent.
In 1991, Menem launched the convertibility plan, pegging the Argentine peso to the US dollar in a bid to rein in hyperinflation. But that move was abandoned a decade later.
Argentina has been grappling with an economic crisis for years, registering double-digit inflation in each of the last 12 years.
Causes of inflation are multiple, including persistent deficit spending, constant devaluation and external factors like the war in Ukraine that affected energy and grain prices.
A result is a baked-in expectation of “systematic increases of prices, tariffs, salaries, rents… according to expectations that are not always solid, sometimes based on fantasy or rumor about future inflation,” economist Ricardo Aronskind told AFP.
In a bid to slow inflation, the center-left government of President Alberto Fernandez last month reached an agreement with food and personal hygiene companies to freeze the prices of around 2,000 products until March, capping rises on another 30,000 products to four percent a month.
Argentina’s economy grew by around five percent in 2022, compared to a 10.3 percent increase in GDP the previous year, which ended three years of recession.
Growth for 2023 is expected to slow to just two percent, according to the World Bank.
If that does happen, it would be the first time in 15 years that Argentina had experienced three successive years of growth — the economy grew six years in a row from 2003 to 2008.
Wage increases have lagged behind inflation, meaning millions of Argentines saw their spending power fall in 2022.
In the early 20th century, Argentina was among the world’s better-off countries, attracting immigrants from Europe, especially, Italy, and the Middle East.
Now, a jaw-dropping 36.5 percent of Argentina’s 47 million population live in poverty, including 2.6 million in extreme poverty, according to official data from mid-2022.