Argentina’s nightmare: the highest inflation in the world

Argentina faces record inflation of 25.5% in December and 211.4% in 2023, surpassing Venezuela and Lebanon. Experts warn of worse scenario in 2024.

According to the Argentinian National Institute of Statistics and Censuses (INDEC), inflation in December reached 25.5 percent, almost twice as much as in November, impacting negatively in the annual inflation rate, that reached 211,4%.

This was the highest monthly increase in 33 years; As a result, Argentina became the country with the highest inflation in the world.

For the first time in years, Venezuela had a lower annual inflation rate than Argentina. The Venezuelan Finance Observatory (OVF), a non-governmental entity, reported that inflation was 3.9% in December (compared to 25% for INDEC) and 193% in 2023. Argentina also exceeded Lebanon, which had an inflation rate of 211% until November.

This is the first measurement under the presidency of Javier Milei. The president had warned that the numbers would be “horrible” in the next months and said that his Economy Minister, Luis Caputo, should be applauded if inflation was 30 percent. This statement could be seen as a way to strengthen his own position, amid challenges to the reforms proposed by the government.

The December figure was twice as high as the CPI for November in part due to the devaluation of the new government.

After the 2023 inflation data was published, the Central Bank released its latest Survey of Market Expectations (REM), a report that shows the predictions of economists, consultants, firms and institutions on the main macroeconomic variables of the country.

On this occasion, the experts revised their inflation forecasts upwards and alerted that the inflation rate for 2024 will be 213 percent. It is important to note that until last month, the experts surveyed by the REM projected that the inflation rate for 2024 would be 191.8%, but they worsened their estimate after the devaluation and the frequent rises in fuel prices.

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