Jan 20, 2020
Argentine Inflation 53.8% in 2019, 2020 is Forecasted at 42.2%
Author: Michael Cordonnier/Soybean & Corn Advisor, Inc.
The 2019 inflation rate in Argentina was 53.8% according to the statistical agency Indec, which was the highest rate in 28 years. Economists from the Central Bank had forecasted in December that 2019 would end with an inflation rate of 54.6%. Consumer prices in December increased 3.7%, which was slightly below the 4.1% expected by economists from the Central Bank. The same economists are expecting the Argentine inflation rate in 2020 to be 42.2%.
Ex-president Mauricio Macri lost his reelection last October due to a number of factors including: high inflation, a devalued peso, a financial crisis, high unemployment, and increased rates of poverty. The new Peronists president Alberto Fernandez, who assumed power on December 10th, faces the same issues and even more. He is trying to renegotiate US$ 100 billion in debts owed to Argentina's creditors in addition to trying to pay back US$ 57 billion owed to the International Monetary Fund. He had indicated earlier that he wanted the renegotiations to be completed by March.
The federal and provincial governments are desperate for additional revenue and that is why commodity export taxes have been increased and that is why some provincial governments are proposing huge increases in property taxes. Both of these provisions will have a direct and negative impact on the farming sector in Argentina.