Argentines are at an impasse as the country's inflation has reached 143%, forcing many residents to buy at second-hand stores to afford products ahead of the presidential election.
The South American country is struggling with an economic crisis that comes as it is the No. 2 economy and major grains exporter in the region. The issue is seen as the worst that the nation has ever faced in decades.
Argentina's 143% Inflation
On top of the economic crisis, rising voter anger is propelling a radical outsider, Javier Milei, in the presidential election to beat Economy Minister Sergio Massa. The latter is the candidate of the ruling Peronist coalition and his bid has been hobbled by his supposed failure to address continuously rising prices across the country.
A 22-year-old student in Buenos Aires, Aylen Chiclana, said that people can no longer just go to a mall and buy something that they want as they did before. Extremely high inflation has caused recent prices to rise to unthinkable levels, as per Reuters.
Now, new jeans in the South American country can cost more than double the price that they were at just a year ago. This number represents more than one-third of the nation's monthly minimum wage. The country's statistics office on Monday said that annualized inflation hit 142.7% in October. It added that the monthly rise landed at 8.3%, which was still down from peaks in August and September and below forecasts from analysts.
The South American nation has battled high inflation for years, which economists argued was a result of money printing and an entrenched lack of confidence in the local peso. Over the last year, inflation in Argentina has quickly accelerated over its highest recorded since 1991.
A 62-year-old semi-retired teacher, Beatriz Lauricio, said that she and her husband, who is an employee at a bus company, go on weekends to a clothing fair in order to sell used garments so that they can make ends meet.
A Potentially New Government
Argentina's dollar bonds due 2035 were also seen to fall to a session low after the publication of the report that talked about inflation in the nation. The notes were seen to have fallen by as much as 0.2 cents to around 2.61 cents on the dollar. This represented the lowest in nearly a week, according to Yahoo Finance.
Regardless of who will win the presidential election, the immediate challenge would be inflation. The current situation has shown that flimsy foreign exchange controls are not sustainable. It also shows that a major currency devaluation is expected to arrive for the next government when it takes office on Dec. 10.
On top of this, narrowing a chronic fiscal gap implies cutting subsidies, which would in turn make utility prices climb even higher. Economists also forecast that Argentina's inflation rate could go up to 185% by the end of the year. This easily surpassed a number from their previous estimations of 180.7%.
The statistics were based on a central bank survey that was published on Monday. The same survey also noted that gross domestic product is expected to contract 2% this year and 1.6% next year. Amid the situation, Milei and Massa exchanged barbs on Sunday ahead of the Nov. 19 presidential runoff vote, said France24.
