Inflation in Argentina reached 8.3% in October and 142.7% year-on-year, 4.4 points higher than the cumulative value of the previous month. Measured since January, prices have risen 120%, the highest percentage in Latin America after Venezuela. However, the numbers were good news for the government of Peronist Alberto Fernández. After two months of inflation above 12%, the country has seen a sharper slowdown than expected with just six days left until the second round of presidential elections. Containing inflation is a particularly relevant issue for Peronist candidate Sergio Massa, who, as economy minister, would prefer to avoid disseminating unfriendly data during the election campaign.
The increase in CPI was particularly high in communications (12.6%), clothing and footwear (11%) and household appliances and maintenance (10.7%). Food, the item that most affects the lower and lower middle classes, was just below average at 7.7%. The increase in housing costs remained at 7.8%. The increase in rents, already expressed in dollars, was not fully reflected in the freezing of tariffs for electricity, gas and water, which add up to the same items. The start of the month was marked by the renaming of food products due to the end of sectoral agreements that left prices unchanged for key products such as meat. There was also an increase in fuel, an item that ultimately affects the remaining sectors of the production chain.
Monthly inflation in Argentina rose from 6.4% in July to 12.4% in August and 12.7% in September, due to the 18% devaluation of the peso that the central bank announced the day after the mandatory primary elections on August 13th. Sergio Massa, the ministerial candidate, had come third, behind conservative Patricia Bullrich and far-right Javier Milei, and the devaluation of the peso was already taken for granted before the discouraging results for the Casa Rosada. The currency’s decline in value was immediately reflected in prices and the consumer price index reached record levels for two months in a row. October reflected the slowing of this inflation sluggishness, although the 8.3% published this Monday is the fourth highest in the annual range.
Inflation has been the problem that worries Argentines most for years, even more than insecurity or corruption. Controlling this will be the next government’s biggest challenge, whatever it looks like. Massa, the originator of the current outbreak, attributes it to the impact of the worst drought in 40 years, which reduced foreign exchange earnings from rural exports by more than $20 billion. The official story also includes the agreement to refinance the $44,000 million in debt that Mauricio Macri’s government took on from the International Monetary Fund. For the ultra Javier Milei, Massa’s rival in the second round, it is neither the drought nor the IMF that is to blame, but the uncontrolled issuance of currencies, so much so that in his election manifesto he promises to “destroy” inflation by “exploding”. “. the central bank.
Massa and Milei faced off last Sunday in the final presidential debate before the election. However, inflation was hardly a topic of discussion. The Peronist candidate managed to avoid the issue, his weakest point in the election campaign. Milei missed the opportunity to attack the Peronist as he was absorbed in answering the questions his rival kept asking him. Ultimately, Argentinians learned nothing about competitors’ strategies to control price increases.