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ECONOMY | 24-04-2023 18:16

Argentina's economy stagnated as inflation surged past 100%

Argentina’s economy stagnated in February, as inflation surpassed 100% for the first time in three decades.

Argentina’s economy stagnated in February as inflation surpassed 100 percent for the first time in three decades and a record drought began to take a heavy toll on industries tied to agriculture. 

Economic activity was flat in February from January, according to government data published by the INDEC national statistics bureau on Monday. From a year ago, the economy expanded 0.2 percent.

Argentina returned to triple-digit inflation in February for the first time in three decades as the government’s unconventional strategy of price freezes, currency controls and multiple exchange rates has failed to cool pressure on the peso. Surging inflation sapped consumer spending as prices in pesos outpace pay raises. The drought could cost Argentina up to US$19 billion of exports, according to one estimate. 

Economists surveyed by Argentina’s Central Bank in March forecast gross domestic product contracting 2.7 percent this year, with sequential declines in the first and second quarters. The economy shrank in the final quarter of last year too. It would be Argentina’s sixth recession in the past 10 years. 

 

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by Patrick Gillespie, Bloomberg

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