MercoPress. South Atlantic News Agency

CPI goes up 25.5% in December in Argentina

“We applied a much deeper adjustment plan than the one requested by the IMF,” Milei explained

Argentina's National Institute of Statistics and Census (Indec) Thursday said the Consumer Price Index (CPI) for December 2023 went up by 25.5% for an interannual total of 211.4%, it was reported in Buenos Aires.

“The General Level of the Consumer Price Index registered a monthly rise of 25.5% in December and accumulated an increase of 211.4% in the twelve months of 2023,″ Indec's report read.

”The division with the highest increase in the month was Miscellaneous Goods and Services (32.7%), as a result of increases in Personal Care items. It was followed by Health (32.6%), driven by variations in medicines and prepaid medicine; and Transportation (31.7%), due to increases in fuels. The division with the highest incidence in all regions was Food and non-alcoholic beverages (29.7%),” the document went on.

Indec also noted that meat and its by-products plus bread and cereals recorded the most significant increases while Education (6.2%) and Housing, water, electricity, and other fuels (13.8%) showed the smaller rises.

The study detailed that Goods and services went up 32.7%, Health 32.6%, Transportation 31.7%, Household equipment and maintenance: 30.7%, Food and non-alcoholic beverages 29.7%, Restaurants and hotels 21.6%, Recreation 20.2%, and Communications 15.6%, among other items.

In 2023, Food and beverages went up 251.3%, or 40 percentage points above the country's average; Household equipment and maintenance 231%; Health 227.7%; Restaurants and hotels 219.4%; and Recreation and Culture 218.2%.

In a radio interview, President Javier Milei said that one month after taking office “people are aware of the disaster” inherited by his government, and “they know that they have to go through a hard time to overcome it.” He also explained that his administration carried out “the fastest negotiation in history” with the International Monetary Fund (IMF). “We applied a much deeper adjustment plan than the one requested by the IMF,” he added before the Indec figures were released. If inflation “is close to 25% it will be a success,” Milei also stressed.

According to the Market Expectations Survey (Relevamiento de Expectativas de Mercado - REM) from consulting firms approached by Argentina's Central Bank (BCRA), inflation will reach 213% this year. The study presents the forecasts of leading economists, consulting firms, companies, and institutions nationwide. This month, the experts corrected upwards their previous projections of 191.8%.

They expect the CPI to be around 25% in January, 18.2% in February, 15% in March, 12% in April and 10% in May. Only in June Argentina would have a single-digit monthly CPI again, with a variation of 8.3%.

The latest REM also envisions further economic contraction for the entire year of 2.6%. Argentina would return to growth in 2025 and 2026, with identical improvements of 2.3% each year.

After the Indec figures were released, Economy Ministry sources quoted by TN said that “the number is clearly better than expected by the consensus of private economists, who were projecting inflation very close to 30%.”

“It reinforces our conviction that we are on the right path. We know that it will be hard in the short term, but this time we are going to make it through,” they added.