we explain hyperinflation, this endemic evil that has affected the country for decades

The South American country has been affected by galloping inflation for years, even approaching 95% last year. An evil that the brand new president Javier Milei, an ultraliberal, promised to address.

Argentina, which has just elected the ultraliberal Javier Milei as president, is also the country of hyperinflation. Compared to inflation in Western countries, the South American country has been breaking all records, and for a long time. Last year, inflation reached 95%, almost doubling prices in one year. The year before, in 2021, it rose to 51%. Before this date, Argentina’s inflation had already been in double digits for 10 years. Franceinfo explains this hyperinflation which characterizes and handicaps the country’s economy.

Historically very high inflation

Rising prices have been a reality in Argentina for decades. In 1989, inflation was almost 5,000%, and 1,350% the following year. To stop this spiral, the country then called on ultraliberal economists from the Chicago school. The IMF gives its revenues and Argentina changes its currency to align with the dollar, while privatizing many sectors of activity. For then President Carlos Menem, the State should only take care of justice, security, education, health and foreign affairs. Inflation is calming down radically but unemployment is exploding. Except that since the beginning of the 2010s, inflation has started again.

Tracking prices, a habit for Argentinians

Faced with prices that change every week, consumers adopt several attitudes. Argentinians constantly check, compare and track prices, as their parents and grandparents did 30 or 40 years ago. They stock up on non-perishable products, telling themselves that what they buy today will be cheaper than in a month. They deprive themselves of meat and fresh produce. To pay for the equipment (refrigerator, vacuum cleaner or even shoes), the consumer divides it into monthly payments as much as possible, in order to liquefy the prices. Many Argentinians therefore have a “no future” attitude.

Treat yourself, a remedy to forget

With this hyperinflation, many consumers cannot buy a car or a house (the central bank’s interest rate is 130%). So, Argentines want to treat themselves and spend their money on restaurants, cinema and concerts. An Argentinian economist provides this analysis: “The one who can’t go on vacation buys concert tickets, the one who can’t afford a concert buys a pizza and a beer.“Due to inflation, 40% of Argentines today live below the poverty line.