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Business News/ Markets / Stock Markets/  Argentina reports its first single-digit inflation in 6 months as markets swoon and costs hit home
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Argentina reports its first single-digit inflation in 6 months as markets swoon and costs hit home

Argentina reports its first single-digit inflation in 6 months as markets swoon and costs hit home

Argentina reports its first single-digit inflation in 6 months as markets swoon and costs hit homePremium
Argentina reports its first single-digit inflation in 6 months as markets swoon and costs hit home

BUENOS AIRES, Argentina — Argentina’s monthly inflation rate eased sharply to a single-digit rate in April for the first time in half a year, data released Tuesday showed, a closely watched indicator that bolsters President Javier Milei’s severe austerity program aimed at fixing the country’s troubled economy.

Prices rose at a rate of 8.8% last month, the Argentine government statistics agency reported, down from a monthly rate of 11% in March and well below a peak of 25% last December, when Milei became president with a mission to combat Argentina’s dizzying inflation, among the highest in the world.

Although praised by the International Monetary Fund and cheered by market watchers, Milei’s cost-cutting campaign and deregulation have in the short term been squeezing families whose money has plummeted in value while the cost of nearly everything has skyrocketed. Annual inflation is at 289.4%

“People are in pain," said 23-year-old Augustin Perez, a supermarket worker in the suburbs of Buenos Aires who said his rent had soared by 90% since Milei deregulated the real estate market and his electricity bill had nearly tripled since the government slashed subsidies. “They say things are getting better, but how? I don’t understand."

Milei’s social media feed in recent weeks has become a stream of good economic news: Argentine bonds posting some of the best gains among emerging markets, officials celebrating its first quarterly surplus since 2008 and the IMF announcing Monday it would release another $800 million loan — a symbolic vote of confidence in Milei’s overhaul.

“The important thing is to score goals now," Milei said at an event at the presidential palace Tuesday. “We are beating inflation."

Even so, some experts warn that falling inflation isn’t necessarily an economic victory — rather the symptom of a painful recession. The IMF expects Argentina’s gross domestic product to shrink by 2.8% this year.

“You’ve had a massive collapse in private spending, which explains why consumption has dropped dramatically and why inflation is also falling," said Monica de Bolle, a senior fellow at the Peterson Institute for International Economics who studies emerging markets. “People are worse off than they were before. That leads them to spend less."

This article was generated from an automated news agency feed without modifications to text.

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Published: 15 May 2024, 12:40 AM IST
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