Argentina‘s monthly inflation rocketed to 4.7% in February, the state statistics agency said on Tuesday, the highest since March 2021 and far above forecasts as the South American country’s president promised a “war” against spiraling prices.
The grains-producing country’s annual inflation rate was already running at over 50% when Russia’s invasion of Ukraine super-charged global commodities costs, a major headache for the government ahead of general elections next year.
Center-left President Alberto Fernandez, with an eye on a inflation targets recently agreed with the International Monetary Fund (IMF), pledged to roll out a package of anti-inflation measures at the end of the week.
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“I promise another fight will start on Friday, the war against inflation in Argentina,” he said. “We are going to put an end to speculators and we are going to put things in order.”
The monthly jump was well above an estimated 4% rise projected by analysts polled by Reuters. Prices jumped 8.8% year-to-date and 12-month rolling inflation hit 52.3%.
The government has agreed an economic plan as part of a $45 billion deal with the IMF that targets inflation of 38%-48% this year. That agreement needs Congress and IMF board approval.
The Economy Ministry said in a statement that the war in Ukraine was pushing up commodities prices while a drought in Argentina had hit grain production.
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“The Russian-Ukrainian war is present in Argentina and that is seen in the prices paid for everything associated with commodities, which are increasing,” Economy Minister Martin Guzman had said on Monday.
Argentina, the world’s No. 1 processed soy exporter and No. 2 for corn, has benefited from high grains prices on its exports, though it has struggled to tamp down domestic prices.
“The rise in the price of commodities worldwide adds more fuel to the fire,” said Isaías Marini, an economist at consulting firm Econviews. “The figure for March will probably be even higher than that for February.”
The government has imposed caps on some grains exports and price freeze agreements on some foods. This week it halted new overseas sales of soy oil and meal, its top exports.
Horacio Larghi, economist at consultancy Invenómica said rising prices of food inputs would start to feed through to consumers.
“In March the situation has become very complicated with strong increases in flour and oils prices, which will undoubtedly soon be transferred to the prices of final goods,” he said.