Argentina’s scorching inflation reached a grim new milestone on Tuesday as statistics bureau Indec reported that 12-month figures topped 100 percent for the first time since 1990, when the country was emerging from hyperinflation.
Prices rose by 6.6 percent in February, the highest one-month jump since a run against the peso in August last year, bringing the 12-month total to 102.5 percent.
The highest hikes were alarmingly seen in the food and beverages category, where inflation stood at 9.8 percent in the last month. In Greater Buenos Aires, foodstuffs jumped even higher, exceeding 10 percent.
Inflation in Argentina has doubled throughout the last year, following a steep monetary expansion during the pandemic. The country has also printed pesos to accumulate dollar reserves for its foreign debts, adding to monetary pressures.
Pollsters agree that inflation is the number one concern among Argentinians. With a crucial presidential election later this year, center-left President Alberto Fernández will face an uphill battle if he decides to run for a second term.
His government has gone through three economy ministers this year, with Martín Guzmán resigning in July during a foreign sector crisis and his successor Silvina Batakis doing so just a month later amid a run on the currency.
Centrist Peronist Sergio Massa has since taken the reins, sealing a deal with Vice President Cristina Kirchner, the most powerful figure in the ruling coalition. While Mr. Massa’s reforms, which include an agreement with the country’s soybean exporters, had brought some short-term relief to the country’s foreign sector, his promises to reduce inflation have so far failed.
The country’s center-right opposition is currently favored to succeed Mr. Fernández’s administration, with discussions of pro-market reforms behind the scenes. Further to the right, populist libertarian economist Javier Milei has gathered significant support by promising to “burn down the central bank” and dollarize the economy.