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Argentina's government (and a bot) say inflation is easing. Shoppers aren't so sure

Published 04/12/2024, 07:11 AM
Updated 04/12/2024, 03:27 PM
© Reuters. A shopper looks at produce in a market, as Argentina is battling inflation that is running on an annual basis above 275%, in Buenos Aires, Argentina, April 11, 2024. REUTERS/Matias Baglietto

By Horacio Soria and Miguel Lo Bianco

BUENOS AIRES (Reuters) -Argentina's government is bullish that its measures to cool one of the world's highest inflation rates are working. Shoppers, however, aren't yet fully convinced.

The South American nation is battling inflation that is running on an annual basis near 290%, and which clocked in at 11% for the month of March alone, official data showed on Friday.

That is, however, down from a peak of 25% in December when new libertarian President Javier Milei took office and sharply devalued the peso currency. He has since spearheaded tough austerity and cost-cutting measures that have helped start to overturn a deep fiscal deficit, win over investors and temper prices.

"Inflation is slowing down sharply," Minister of Economy Luis Caputo wrote on Twitter on Wednesday. He reposted a social media account called @BotCoto on X, which describes itself as a bot - an automated account - and claims to track supermarket prices at a local retail chain.

Opposition politicians have criticized Caputo for quoting the bot and another similar account. Reuters could not immediately establish who was behind it.

Meanwhile, poverty is rising and economic activity has stalled, sharpening the hardship felt by millions. Prices from groceries to healthcare are still climbing steeply, even in dollar terms.

"There is no drop in inflation, it is just words," said Maria Gen as she shopped for fruit and vegetables at a market in San Fernando on the outskirts of Buenos Aires earlier this week.

"I took advantage of coming to the market thinking that prices were going to be cheaper and they are just the same as in my neighborhood."

Analysts and economists say core inflation has shown signs of easing. But 11% is still far higher than the price rise most countries see in a whole year.

"Inflation is slowing sharply, but (utilities) tariff hikes are coming and that will prevent it from falling as much as it could do," said Argentine economic analyst Aldo Abram ahead of Friday's data. However, the government was "nipping in the bud" the risk of hyperinflation, he added.

© Reuters. A shopper looks at produce in a market, as Argentina is battling inflation that is running on an annual basis above 275%, in Buenos Aires, Argentina, April 11, 2024. REUTERS/Matias Baglietto

Presidential spokesman Manuel Adorni told reporters on Thursday the government would slay inflation, though it was hard to say how quickly.

"The end of inflation will be a reality," he said. "When? Of course we don't know, because we don't have a crystal ball."

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