2023's Inflation in Argentina is Surpassing Recent Years Again

You’d be forgiven to think that Argentina is the Spanish word for inflation, given the long relationship the two share. South America’s 2nd-largest economy has had a recurring inflation problem for decades, including infamously during economic crises in the 1980s and early 2000s.

At present, Argentina has the world’s 4th-highest annualized inflation rate in the world at 115.6%, behind only Zimbabwe, Lebanon, and Venezuela. Prices are soaring and the value of the Argentinean peso has been crippled, leading to the widespread use of a number of alternative currencies as people seek to protect their money.

A number of factors are behind this hyperinflation, but the effects are regardless the same: ordinary Argentines are hurting. Having a weak currency makes everyday life significantly more difficult, and doubly so in times of economic crisis and drought. The country’s economy hasn’t grown since 2011, meaning per-capita the situation has only worsened in the last 12 years. Current poverty estimates hover around 43%; all the while, Argentina experienced this year its worst drought in over 60 years.

On the inflation front specifically, the numbers look especially grim, with a monthly inflation rate in June of 50.7% that is higher than the total inflation rates seen in 2017, 2018, and 2020. While half of the year remains, given the tough situation and the prospects for greater spending in the run-up to October’s election, it’s unlikely this year will be the one where Argentina’s money worries end.

There are lots of prospects to look at for potential relief and even hope, whether from International Monetary Fund loans, rising natural gas exports, or economic growth forecasts for this year. Regardless, we’ll keep an eye on Argentina, and its inflation issue in particular, in the hopes that the situation turns around soon and the country which used to be among the richest worldwide will soon reclaim some of that economic glory.