Argentina’s inflation rate is soaring amid a severe economic and financial crisis. Consumer prices climbed 71% in July year-on-year, the country’s statistical office Indec said on Thursday.
In July alone, prices increased by 7.4% compared to the previous month as peso continues to lose value against the U.S. dollar and the country’s debt grows.
The government recently announced it would freeze prices and salaries for two months in order to slow the decline in the value of the national currency, the peso. Argentina’s inflation rate is one of the highest in the world. To finance the budget deficit, the South American country’s central bank is constantly printing fresh money.
Moreover, Argentina has been suffering from a severe economic crisis for years due to a bloated state apparatus, low productivity in industry and a large shadow economy that deprives the state of much tax revenue.
The latest inflation news comes despite efforts by Argentina’s new economic “super minister” Sergio Massa, who imposed the price and wage freezes. “The situation is distressing but we are taking measures we believe will bring down the numbers,” he says.
Masso, who headed the Argentina’s lower house of Congress, admits his efforts were take time to bcome effective. “The inflation problem has been with us for many years and it will not go away over night. It will require disciplined and often painful remedies.”
Some 37% of Argentina’s population of 45mn live in poverty, while inflation for the first half of the year topped 36%.