Buenos AiresInflation in Argentina – Latin America’s third-largest economy – picked up slightly in August to 4.2 percent from 4.0 percent the previous month. Inflation on an annual basis was 236.7 percent, one of the highest levels in the world.
The National Statistics Institute (INDEC) released the report and added that the cumulative figure for the first eight months of the year reached 94.8 percent.
The figure was higher than expected by analysts and the government, which hoped to break the 4 percent monthly line for the first time this year.
The increase was led by housing, water, electricity and gas, which registered an increase of 7.0 percent due to the impact of increases in rental prices and utility rates. This was followed by education (6.6 percent), transportation (5.1 percent) and communication (4.9 percent).
Amid rising inflation, Argentina is experiencing a drop in consumption, which was reflected in the indicators of business chambers and showed a fall of 10.5 percent annually in August, despite aggressive price reductions and credit purchase promotions.
Latin America’s third-largest economy (behind Brazil and Mexico) contracted 5.1 percent in the first quarter of 2024 compared to the same period last year, and had already fallen 1.9 percent in the fourth quarter of 2023.
“There is not a penny, people don’t buy anything that is not essential,” Mariana Noriega, a saleswoman at a traditional hairdresser’s in downtown Buenos Aires, told AFP. Sales in the sector fell 29.3 percent year-on-year in August, followed by pharmacies, which fell 17.4 percent.
According to the Indec report, the food and non-alcoholic beverages sector registered a price increase of 3.6 percent in August, significantly lower than that recorded the previous month (6.1 percent).
Aggressive price discounts on some products were introduced to counteract the drop in sales, industry sources said.
“Customers have gone from filling their shopping carts at the supermarket to just needing a small bag to go to the local shop where they do their daily shopping,” Fernando Savore, vice president of the Federation of Grocers of Buenos Aires, told AFP. “We are in a deep hole, as the ‘end of the month’ begins on the 15th.”
In this context, promotions are the order of the day. “Some prices are reduced by up to 50 percent to encourage customers to buy,” said Savore.
“The drop in sales is felt, while electricity rates continue to rise. In my business (a store in Villa Sarmiento) I went from paying 94 thousand pesos in July (about 96 dollars) to paying 240 thousand in August (245 dollars). With few sales it is more difficult,” said the merchant. (With information from Reuters and AP)
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– 2024-09-23 03:29:08
