Argentina’s Inflation Soars Above 100% as Shoppers Race for Deals

Introduction

A man pushes a cart at the Mercado Central, the city’s largest wholesale central market, which receives produce from the entire country, as Argentines face a daily race for deals as inflation soars above 100%, on the outskirts of Buenos Aires, Argentina September 12, 2023. REUTERS/Matias Baglietto

Argentina’s Inflation Hits Highest Level Since 1991

BUENOS AIRES, Sept 13 (Reuters) – Argentina’s annual inflation rate shot up to 124.4% in August and hit its highest level since 1991, stoking a painful cost-of-living crisis in the South American country.

Shoppers Struggle to Find Deals as Prices Soar

The soaring prices, which rose more than expected, are forcing hard-hit shoppers to run a daily gauntlet to find deals and cheaper options as price hikes leave big differences from one shop to the next, with scattered discounts to lure shoppers.

Quotes from Shoppers

• “It’s so hard. Each day things costs a little more, it’s like always racing against the clock, searching and searching,” said Laura Celiz as she shopped for groceries in Tapiales on the outskirts of Buenos Aires. “You buy whatever is cheaper in one place and go to the next place and buy something else.”
• Her husband, Fernando Cabrera, 59, was doing sums on a calculator to compare fruit and vegetable prices. “In this way we try to beat inflation or at least compete with it a little,” he added.

Central Bank Analysts Predict Higher Inflation

A central bank analyst poll, released after the data, forecast inflation would end the year above 169%, a sharp hike from its estimate a month earlier of 141%. It predicted monthly inflation of 12% in September and 9.1% in October.

Economic Crisis and Political Uncertainty

Argentina is caught in a cycle of economic crises, with a major loss of confidence in the peso driving steady depreciation, triple-digit inflation, negative central bank reserves and a flagging economy due to drought hitting farming. The country is also battling to salvage a $44 billion deal with the International Monetary Fund (IMF) and facing the prospect of a $16 billion legal bill after a U.S. court ruling related to the state takeover of energy firm YPF a decade ago.

Impact on Presidential Elections

That’s playing into a race towards presidential elections next month, with radical libertarian Javier Milei the shock frontrunner ahead of establishment candidates economy minister Sergio Massa and conservative Patricia Bullrich.

Fears and Uncertainty for Business Owners

Business owners, who themselves face a tricky cycle of wholesale prices rising before they’ve shipped merchandise and been able to restock, are also suffering from product shortages due to the uncertainty of inflation.

Quotes from Butcher Marcelo Capobianco

• Butcher Marcelo Capobianco, 53, fears having to close his business and is considering emigrating overseas. He displays meat prices in dollars, the currency that many use as a refuge from the constant devaluation of the peso. “It’s dramatic. We don’t know how we’re going to pay the rent this month, how we’re going to pay the electricity,” Capobianco said at his butcher shop in Olivos, on the outskirts of Buenos Aires. “People are angry and have every right to be because they can’t afford to buy a kilo of meat.” “We are already thinking about what we are going to do because, in reality, if this continues, I think we are going to have to shut up shop,” he said.

Conclusion

Argentina’s inflation crisis continues to worsen, with prices soaring above 100% and hitting their highest level since 1991. Shoppers are struggling to find deals and cheaper options, while business owners face product shortages and financial uncertainty. The upcoming presidential elections and economic challenges further contribute to the country’s crisis. The future remains uncertain as Argentina battles to stabilize its economy and regain confidence from both its citizens and international investors.