Inflation in Argentina speeds up, prompting government crackdown

Argentina’s inflation accelerated last month at the fastest pace since President Alberto Fernández took office in late 2019, prompting the government to tighten its unorthodox controls over companies.

Consumer prices rose 4.2 percent in March from February, according to the median forecast of economists surveyed by Bloomberg ahead of Thursday’s release. Economy Minister Martín Guzmán said Wednesday that inflation should cool in April after reaching its peak for the year last month.

Double-digit inflation has been a persistent problem for recent administrations in Argentina. To combat it, Fernández’s government has relied on unorthodox tools including price caps and agreements, rejecting traditional monetary options used by most countries.

The recent spike, with the inflation rate running at about 40 percent annually, threatens to derail Argentina’s fragile economic recovery six months before key midterm elections. On Wednesday, the government ordered stricter enforcement of price controls and said it would hire as many as 500 inspectors to ensure businesses are complying with regulations.

Guzmán asked for “more cooperation” by companies to try to reach the government’s 29 percent annual inflation target for the end of 2021. Economists say the rate accelerated to almost 42 percent in March.

The clampdown on prices has also led to an uneasy relationship between Fernández’s government and businesses. US companies recently asked his administration to ease up on price controls, calling the regulatory environment “hostile, restrictive and unpredictable.”

Argentina’s statistics agency INDEC is set to release March’s inflation rate at 4pm on Thursday.