Nov 15, 2022
Argentina Government Freezes Price on Thousands of Items
Author: Michael Cordonnier/Soybean & Corn Advisor, Inc.
Inflation in Argentina is expected to reach 100% by the end of the year and the Argentine government is desperate to tame inflation before elections next year. Last Friday, the government announced a price freeze and price regulation on thousands of consumer goods to last for at least the next four months.
This comes on the heels of thousands of protestors in the streets of Buenos Aires last Thursday protesting the federal government and the International Monetary Fund (IMF) that loaned Argentina billions of dollars to avoid default. The IMF is currently negotiating with Argentina concerning repayment terms and austerity measures. This has put the government in a very difficult position because the more the peso devaluates, the harder it will be to pay back the loans based on dollars. It is even more difficult for the citizens of Argentina where the poverty rate is now approaching 40%.
The prices on some items on the list will be allowed to be increased 4% before the prices freeze takes effect. For other items, the prices are frozen at current levels, but they will be allowed to increase 4% per month. As one economist put it "The increase in food prices is barbaric and December is going to be brutal."