Why Argentina’s Inflation Is Up Over 100% Again

Argentina is facing some of the world’s highest inflation, with a rate that’s back over 100% for the first time in three decades. The government is on its third economic minister since July and President Alberto Fernandez’s leftist coalition looks permanently split. South America’s second-largest economy has almost no access to international capital and is struggling to comply with the conditions attached to a $44 billion aid program agreed to with the International Monetary Fund. Any bright spots? So far, a population hardened by decades of economic crisis has not turned to the kind of violent street protests that brought down the insolvent government of Sri Lanka in 2022. But the most likely paths forward all involve significant levels of pain.

Argentina nosedived into an economic crisis in 2018 and it’s never fully recovered. Annual inflation has been above 50% most of the time since then; it reached 103% in February. Inflation’s impact has been exacerbated by three years of recession — since the 1950s, Argentina has spent more time in recession than almost any other nation, according to the World Bank. Nearly 40% of Argentines live in poverty today, compared to about 25% at the start of the crisis. Still, today’s price gains remain far from the heights reached in the country’s last bout of hyperinflation from 1989 to 1991, when it surpassed 3,000% annually.