Argentina's inflation edges up in June, breaking a months-long streak in a blow to President Milei

[Judi Lynn]

BY ISABEL DEBRE
Updated 9:17 PM CDT, July 12, 2024

BUENOS AIRES, Argentina (AP) — A closely watched measure of inflation in Argentina was stronger than the libertarian government of President Javier Milei would have hoped on Friday, as the official statistics agency reported prices edging up in June and breaking a months-long streak of declines.

Argentina’s consumer price index rose 4.6% in June, slightly up from the rate of 4.2% in May, ending a five-month trend of cooling inflation that experts had attributed to a deepening recession brought about by Milei’s harsh austerity. The International Monetary Fund predicts a 2.8% contraction this year.

President Milei has touted the falling prices over recent months as a victory in his fight against Argentina’s worst economic crisis in over two decades.

After Milei took office in December, monthly inflation peaked at 25%. But the price drop since hasn’t offered much relief to ordinary Argentines as Milei presses on with a radical economic overhaul that involves slashing generous energy subsidies, scrapping price controls and devaluing the Argentine peso.

More:
https://apnews.com/article/argentina-inflation-economy-dollar-peso-black-market-libertarian-milei-d288baeae4410265bdef5e244b2c8e56

[lapfog_1]

1. austerity is almost never the answer.

His policies will just make the situation worse for the Argentinians.

Usually this will end rather badly... autocrats often turn to scapegoats, ones they can blame for their economic woes. Sometimes this can lead to war... as war is a sort of appeal to patriotism ( everything must go to the war effort ), xenophobia, and, instead of austerity, the government checkbook is wide open.

So I guess Chile, Brazil, and England ( second Falkland war ) should keep on their toes.

[RedArkGuy]

2. Deflation by austerity . . .

. . . may bring prices down, but it brings higher unemployment.