Argentina records its highest inflation in 30 years and displaces Venezuela as regional leader

On 11 August official inflation data for Argentina were released. The data published by INDEC – National Institute of Statistics and Census – were worse than expected.?During the month of July the monthly variation of prices was 7.4%,?the accumulated total for the year (from January to July) was 46% and in interannual terms (July 2021 – July 2022) inflation was 71%.

July's figure of 7.4% represents not only the highest figure gained under Alberto Fernández's government, but also?the highest inflation rate in the last 20 years.?In monthly terms, this figure is only surpassed by the 10.4% of April 2002, when the convertibility plan ended. Likewise,?the 71% year-on-year rate is the highest in 30 years, specifically since the 76% reached in January 1992.

And that is not all.?Estimates by the Central Bank of Argentina point to price increases exceeding 90% in 2022.?An inflationary spiral that, according to the monetary authority, will continue for the next few years. Its expectation is that in?2023?prices will rise by?76.6%?and that in?2024?annual inflation will be around?60%.

With such data, Argentina has clearly become the most inflationary country in the region. It is followed by Venezuela (5.3%), Chile (1.4%), Peru (1%), Colombia (0.8%), Uruguay (0.7%), Paraguay (0.7%), Mexico (0.7%), Bolivia (0.6%) and Ecuador (0.2%). Brazil recorded deflation of 0.7% as a result of the tight monetary policy followed by its central bank.

In conclusion, although Argentina has accustomed us to exorbitant levels of inflation, it never ceases to surprise us.?Massa has a really complicated challenge ahead of him.