MercoPress. South Atlantic News Agency

Argentina's inflation for April of 2022 set at 6% – worst YoY data in 30 years

In January of 1992, year-on-year inflation reached 76%

Argentina's National Institute for Statistics and Census (Indec) Thursday announced that inflation for the month of April of 2022 had reached 6% for a total of 58% in the last 12 months, which turned out to be the country's highest figure in 30 years.

Year-on-year inflation thus surpassed the record it had reached in May 2019 under then-President Mauricio Macri (57.3%), although the international scenario back then was not pushing prices upwards like the war between Russia and Ukraine is doing now. In any case, this last year was the worst in terms of price dynamics since hyperinflation in the late 1980s. Interannual inflation by March was already at 55.1%.

In April, the categories that increased above average were Garments (9.9%), Restaurants and Hotels (7.3%), Health care (6.4%), and Food and Beverages 5.9 %.

With that variation - and thanks to monthly peaks such as 6.7% in September 2018, 5.4% the following month, and 4.7% in March 2019 - year-on-year inflation reached 57.3%.

In January of 1992, year-on-year inflation reached 76%. Only in April of 1991 had the anti-inflation convertibility plan been put in place.

According to the Central Bank's latest Relevamiento de Expectativas de Mercado (REM) report, average inflation of 65.1% is expected by December.

According to Economy Minister Martìn Guzmán, a new batch of measures agreed upon with the International Monetary Fund (IMF) is coming up, which will result in less inflationary pressure through the reduction of the primary deficit and monetary emission coupled with the accumulation of reserves.

After April's Consumer Price Index (CPI) was released, Argentina's Central Bank (BCRA) raises the basic interest rate from 47% to 48%. Hence, the Nominal Annual Rate (NAR) for a 30-day fixed term deposit for individuals will be 48% up to AR$ 10 million, which represents a yield of 60.1% effective annual rate (EAR), still below inflation projections.

“The BCRA will continue to monitor the evolution of prices and will evaluate reversing the bias of the monetary policy as soon as a decreasing path of the inflation rate is consolidated,” it was announced.

This is the fifth interest rate hike so far this year, after starting at 38%.