The inflation rate in Argentina has passed the 100% mark this week with consumers particularly hard hit by increasing food prices – the price of meat alone increased by almost 20% in the last month.
With the government divided on how best to tame the rising prices, Argentina has struggled to contain inflation and stablise the economy. Last year, the ailing economy saw three economic ministers succeed each other in just one month.
The country has a long history of economic woes with a debt crisis in the 1980s followed by hyperinflation. In recent years, the country has once again been plagued by surging levels of international debt. In 2018, they were bailed out by the IMF in a $57 billion loan deal – the largest ever provided by the fund.
With unemployment hovering around 7% and the estimated growth in GDP slowing to 2% for 2023, the Argentinian government really has a cocktail of economic problems to solve with no easy way out.
Q1. Define inflation.
Q2. Explain the impact that high rates of inflation has on living standards.
Q3. Evaluate the policy options available to a country like Argentina to try and dampen the rate of inflation.
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