Argentina ended 2022 with 94.8 percent yearly inflation, the highest in 32 years, the INDEC statistics bureau reported yesterday.
The figure almost doubled the rate seen in 2021 — when President Alberto Fernández’s administration oversaw a 50.1-percent increase in prices — while also topping the 84-percent jump seen in 1991, when the country came out of the hyperinflation of 1989-1990.
Argentina finished the year with the world’s fourth-highest inflation, behind only Venezuela, Zimbabwe, and Lebanon, which posted rates of 305, 244, and 142 percent, respectively.
Prices in December rose by 5.1 percent, similar to the 4.9 percent from the month prior, and a slight improvement on the 6 to 7.5 percent monthly figures seen between July and October, following a mid-year run on the Argentinian Peso.
Since jumping from ARS 210 per dollar to ARS 340 in July, the peso has been relatively stable, now trading at ARS 343 to the greenback in the free market.
Another small consolation prize came with basic foods and drinks once again seeing smaller hikes than products in other categories. Restaurants and hotels saw the highest jumps (7.2 percent), followed by tobacco and alcoholic drinks, and home appliances.
Inflation continues to be the number one priority for Argentinian voters, and one of the two biggest concerns of Economy Minister Sergio Massa, together with increasing the inflow of dollars into the country to pay for imports and repay loans.
The country faces a presidential election later this year, and Mr. Massa wants to show a downward inflationary trajectory before the vote. Reaching three-figure inflation would surely put a pin in the government’s re-election chances.
The doubling of inflation from 25 to 50 percent was central in former president Mauricio Macri’s defeat in 2015, hyperinflation in 1989 put an early end to Raúl Alfonsín’s government, as did the inflationary spiral of the last years of the dictatorship in 1982-1983, and that of Peronism in 1975 before being ousted by the military.
Taming hyperinflation with the one-to-one peso-dollar peg during the 1990s, meanwhile, was key for Carlos Menem’s 1995 re-election until the crash of the peg led to the worst financial crisis in Argentinian history in 2001.
But with mass-scale peso-denominated debts, a significant fiscal deficit, and the need to purchase dollars to stay in line with International Monetary Fund requirements, Argentina could need to print more pesos in 2023, stoking inflationary fires further.
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