ARGENTINA registered inflation of 94.8% last year, its highest annual figure since 1991, the Indec national statistics institute said yesterday.

Latin America’s third largest economy has one of the highest inflation rates in the world but December’s monthly figure of 5.1% continued a general downward trend since a peak of 7.4% in July.

It was a huge jump on the 50.9% inflation from 2021.

The government has set a 2023 inflation target of 60%.

Price rises were steepest in clothing and footwear, at more than 120%, and hotels and restaurants, where they jumped a little under 109%.

It was bad news for the government just nine months out from a general election.

These are the worst yearly figures since Argentina recorded an inflation rate of more than 171% in 1991, during the presidency of Carlos Menem.

The two previous years had seen hyperinflation at more than 2,000%.

In 1991, Menem launched the convertibility plan, pegging the Argentine pesos to the US dollar in a bid to tackle hyperinflation. But that move was abandoned a decade later.

Argentina has been grappling with an economic crisis for years, registering double-digit inflation in each of the last 12 years.

In a bid to slow inflation, the centre-left government of President Alberto Fernandez last month reached an agreement with food and personal hygiene companies to freeze the prices of around 2,000 products until March, capping rises on another 30,000 products to four percent a month.

Argentina’s economy grew by around 5% in 2022, compared with a 10.3% increase in GDP the previous year, which ended three years of recession.

Growth for this year is expected to slow to just 2%, according to the World Bank.

If that does happen, it would be the first time in 15 years that Argentina had experienced three successive years of growth – the economy grew six years in a row from 2003 to 2008.

Wage increases have lagged behind inflation meaning millions of Argentines saw their spending power fall last year.

Some 36.5% of Argentina’s 47 million population lives in poverty, including 2.6 million in extreme poverty, according to official figures from mid-2022. – AFP, January 13, 2023.