Inflation crisis in Argentina: country in debt, prices of basic necessities soaring
In this country, chaos unfolds because no one knows the value of anything. That’s because an iPhone costs the same as six months’ rent.
Hyperinflation not only causes a political breakdown that could cost a president a job, but it causes a situation where the price of everyday items is so far from normal that no one knows what something is worth anymore. thing.
This is the situation in Argentina, where the inability to control prices caused inflation to skyrocket to 58%.
For the public, this means shopping is a difficult experience where paying for basic goods involves guesswork and finding the best price is nearly impossible.
A Bloomberg analysis reveals shocking results on the costs of items Australians take for granted.
“A two-hour domestic flight costs the same as a month of college tuition, a pair of sneakers equals the minimum monthly Social Security payment, and a new iPhone costs the average rent of half a year or so. more,” the post notes. .
The price dispersion was perfectly summed up by an economist from Beunos Aires, who told Bloomberg: “Nobody knows how much something costs”.
“Talk to any Argentinian of a certain age and they can probably tell you how much something cost in the 1990s, but they can’t remember how much something costs today compared to yesterday,” said Federico Moll, director of economic research at consulting. EcoLatina company.
President Alberto Fernandez could be the latest victim of an economic bloodbath that cost the man responsible for taming spiraling inflation last week.
Internal Trade Minister Roberto Feletti resigned last Monday “over differences over how to contain the steady rise in prices”, reports Reuters.
Approval ratings for the president are down and he is under fire from Vice President Cristina Fernandez de Kirchner.
But controlling inflation is no easy task in a country that has been unable to do so for three previous administrations.
News of Argentina’s struggles comes as the country announced on Tuesday that it had reached an agreement with the Paris Club of creditor nations to postpone repayment of more than $2 billion in debt until September. 2024.
The decree in the Official Bulletin formalizes an agreement announced in March on the final repayment of a renegotiated debt in 2014.
Argentina had already secured two $2.45 billion debt extensions, the last of which was due to expire on Friday.
The Paris Club is a group of creditor countries specializing in finding payment solutions with debtor countries at risk of default.
The repayment extension was already part of repayment negotiations with the International Monetary Fund on another $44.5 billion in debt with the global financial institution, the executive order said.
The agreement authorizes Argentina’s economy ministry to “make partial debt service payments” to Paris Club members.
The government of President Alberto Fernandez is negotiating with each of the creditor countries and the Paris Club authorities as a whole to propose a new repayment program.
– With AFP