Weary Argentines have mixed feelings as world’s worst inflation eases
2024.08.14 10:08
By Miguel Lo Bianco
BUENOS AIRES (Reuters) – Argentines, feeling the pinch of the world’s highest annual inflation rates, are feeling both hopeful and weary as monthly price rises dip down towards 4%, the lowest in over two years amid tough austerity under President Javier Milei.
The South American country, where yearly inflation stands at 271%, is trying to emerge from a severe economic crisis, which ushered libertarian outsider Milei into power late last year as voters opted for a radical new approach to restore stability.
Milei’s sharp cost-cutting campaign has helped bolster the state’s embattled finances, allowed the central bank to rebuild reserves, and tamped down inflation – though has taken a heavy toll on economic activity. Poverty levels have also risen.
“I am tired, but this is something different to what we have seen before, that’s for sure,” said Miguel Jamui, a 69-year-old retired worker, who is hopeful Milei’s maverick approach will start to yield results.
Analysts predict monthly inflation in July, set to be released later on Wednesday, will come in at 4%, the lowest since the start of 2022. A government source said he hoped it might be as low as 3.8-3.9%.
Milei’s policies have helped bring down monthly inflation from over 25% in December to below 5% in recent months, though the country has slid into recession and subsidy cuts have pushed up prices of certain services and goods.
Many Argentines still feel their purchasing power is dwindling despite inflation slowing, with poverty affecting half the population and over seven million children living in poverty, according to a study released this week by UNICEF.
Milei’s government argues that fiscal responsibility is essential to stabilize the economy and cautions that things will get tougher for Argentines before improving.
Maria Ruiz, a 43-year-old teacher, said she was still having to tighten her belt due to the economic crisis.
“It’s incredible that every time you try to maintain a standard of living, you fall, you fall, you fall,” Ruiz said near the iconic Obelisco monument in central Buenos Aires where shop windows were full of promotions to attract customers.
“I see that merchants are trying to survive with promotions or whatever they can, but the truth is, it’s not enough.”
