‘Country of beggars’: Argentines reel as 104% inflation keeps rising

By Miguel Lo Bianco

BUENOS AIRES (Reuters) – Argentines, grappling with one of the highest inflation rates in the world at 104% – and rising – are increasingly having to skimp and save as salaries fall behind prices, stoking anger and frustration at the country’s center-left government.

The South American nation, an important grains exporter and the region’s no. 2 economy, is expected to have seen prices rise 7.5% in April alone, a Reuters poll of analysts shows, with the inflation rate for the year likely to end near 130%.

That has pushed one in four people into poverty in a country that in the early 1900s was among the wealthiest in the world, though it has battled for decades with high inflation, along with cyclical debt and currency crises. Dwindling central bank reserves are now imperiling the government’s finances.

“They’ve turned us into a country of beggars,” Carlos Andrada, a 60-year-old self-employed worker, told Reuters as he searched for cut-price deals at a vegetable stall at a market in the suburbs of capital city Buenos Aires.

“One despairs because after working all your life, you have to fight just to get a tomato or a bell pepper,” he said.

Argentina’s fragile economic situation has been aggravated by a historic drought since last year, which has hammered soybeans, corn and wheat exports, draining foreign reserves and hindering the government’s ability to fight currency weakness.

Volatility in the foreign exchange market, which saw the peso hit record lows near 500 to the dollar in parallel markets last month, has inflamed prices further and strained Argentina’s huge $44 billion loan deal with the International Monetary Fund.

“When I came last time (to the market), I paid 300 pesos a kilo for bell peppers – it’s 300 pesos a half kilo now,” said Olivia María Belbruno, 70, a retiree.

“These are the governments we have and we, the citizens, must think because we are the ones who give them our votes.”

The Peronist ruling coalition is battling to bring prices down ahead of August primary elections and a general ballot in October, where high prices and poverty are badly hurting its chances of staying in office as voters feel the pain.

“I’ve stopped going out to eat once a month, we haven’t been on vacation anywhere for four years, we had to sell the car because we couldn’t pay insurance, licenses and garage costs,” said graphic worker Salvador Paterno, 64.

“We use little air conditioning, heating. Everyone cuts back on these habits to make ends meet – if you even make it at all.”

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