“Argentinians Grapple with Skyrocketing Inflation Rates and Increasing Poverty”

Argentinians, who are grappling with one of the world’s highest inflation rates of 104 percent and still rising, have an increasing need to save as wages lag behind rising prices, Reuters reports. This has fueled growing anger and frustration among local residents towards the ruling centre-left government.

Prices in the South American country, a major grain exporter and South America’s second-largest economy, are expected to rise 7.5 percent in May, a Reuters poll of analysts said. The annual inflation rate will most likely be around 130 percent.

For this reason, one in four Argentines is in a state of poverty in a country that in the early 1990s was among the richest in the world, but for decades has struggled with high inflation, huge debt and currency crises. State finances are seriously threatened by the decreasing reserves of the central bank.

“They have turned us into a country of beggars,” self-employed Carlos Andrada, 60, told Reuters, looking for bargains at a vegetable stand in a market on the outskirts of Buenos Aires. “One despairs after having worked all his life and now has to fight for a tomato or a pepper,” he says.

Argentina’s volatile economic situation has been further exacerbated by a prolonged drought that has gripped the country since last year, which has damaged exports of soybeans, corn and wheat, depleted foreign reserves and prevented the government from combating a weak local currency.

Foreign exchange volatility, which saw the peso hit record lows of nearly 500 to the dollar on parallel markets last month, further fueled prices and called into question the country’s massive $44 billion loan deal with the International Monetary Fund.

The ruling Peronist coalition is struggling to lower prices ahead of August’s primary election and October’s general runoff. High prices and poverty significantly reduce their chances of staying in power, BTA reported.