Argentina’s inflation rate rose to 4.6% in June 2024, breaking a five-month streak of deceleration and marking the highest monthly increase since President Javier Milei took office in December 2023. The National Institute of Statistics and Censuses (INDEC) reported that the annual inflation rate reached a staggering 271.5%, with a 79.8% increase in the first half of the year.The main driver of June’s inflation surge was the housing, water, electricity, gas, and other fuels sector, which saw a 14.3% increase due to the government’s decision to reduce subsidies on essential services. This was followed by increases in restaurants and hotels (6.3%) and education (5.7%).Despite the setback, President Milei and other government officials celebrated the figure, as it was lower than some analysts’ predictions. Milei took to social media, stating, ‘And it ended with 4…’ and criticizing analysts who had forecasted rates between 5.5% and 6.5%. Minister of Economy Luis Caputo described it as the second-best result of the last year.However, the inflation increase has raised concerns about the effectiveness of the government’s economic policies. The country’s cost of living surged nearly 80% in the first half of 2024, and the peso fell to a record low against the dollar. To maintain voter support and keep prices in check, Milei has postponed further increases to fuel taxes and utility prices.The impact of inflation continues to be felt across the country. Food and non-alcoholic beverage prices rose 3% compared to May and accumulated a 285.1% increase over 12 months. The minimum wage has decreased 28% in real terms since November 2023, while the Universal Child Allowance has increased 65% in real terms since December last year.As Argentina grapples with this economic challenge, the coming months will be crucial in determining whether the government’s policies can effectively curb inflation and restore economic stability. The government predicts that the inflation rate will be around 3% in July, but uncertainty remains due to expected price increases in various sectors.
Key points
- Argentina’s inflation rate rose to 4.
- The annual inflation rate reached 271.
- President Milei and government officials celebrated the figure as lower than some analysts’ predictions.
- Concerns remain about the effectiveness of the government’s economic policies and the impact on cost of living.
6% in June, breaking a five-month downward trend.
5%, with a 79.
8% increase in the first half of 2024.
Contradictions👾While government officials celebrate the 4.
6% inflation rate as a success, some analysts and reports suggest that the economy is not showing signs of recovery and that the government’s strategies are not effectively addressing the root causes of inflation.
