Argentina’s triple-digit inflation, among the world’s highest, is starting to slow down but this offers little relief for workers whose salaries have stayed the same while costs of basic goods skyrocketed and the government slashed state subsidies.
“We’re losing track of what’s expensive and what’s cheap,” said university professor Daniel Vazquez while shopping in Buenos Aires. “Prices keep going up and the only thing that isn’t going up is salaries.”
“The gap is very, very big,” he said.
While annualized inflation in September remained well into the triple digits at 209%, month-on-month price hikes slowed to their lowest level since late 2021 at 3.5%, data from the national statistics agency showed on Thursday.
The data landed in line with the forecasts of analysts, who predict that inflation will end 2024 at 124%.
Libertarian President Javier Milei has cut subsidies to sectors such as energy and transportation, while vowing to trim what he calls bloat in the public sector, shuttering some offices and trimming jobs.
“You’ve never seen inflation being fought like this before. It takes a little longer but it’s genuine,” Milei wrote on X after the inflation data was published on Thursday.
The tough austerity drive has prolonged a recession and caused poverty rates to surge to around 53%.
Computer programmer Ivan Cortesi, 30, said that while food prices remained similar to last month, utility costs rose significantly.
“This past month there has been a significant increase in all utilities,” he said.
According to the statistics agency, rents as well as water, power and gas prices led monthly inflation, up over 7%, followed by clothing and shoes which rose 6% and education costs that increased over 4%.
Food prices increased just 2% from last month but more than tripled their level from a year ago, while housing and utility costs nearly quadrupled. Cigarettes, alcohol, healthcare, transport and communications also tracked annual inflation well above 200%.
Milei devalued the local currency when he took office in December, and the sharp spending cuts have particularly hit informal workers, civil servants, pensioners, doctors and teachers.
On Wednesday, Argentina’s Congress failed to overturn Milei’s controversial veto of a law that would have shored up university spending in line with inflation, following mass protests by students and university workers against the measure.
Milei has vowed to veto any law that threatens the fiscal balance.
(Reporting by Horacio Fernando Soria and Hernan Nessi)
