Facundo Iglesia 
Argentina’s monthly inflation rate was 12.7% in September, according to the National Institute for Statistics and Census (INDEC, for its Spanish acronym). The figure represents the highest monthly rate since February 1991, when the country was mired in a hyperinflation crisis.
The second-highest inflation figure since then was in August, when prices rose by 12.4% according to the INDEC.
The INDEC’s report is the second to reflect the 22% devaluation that raised the country’s official US dollar exchange rate to AR$350.
Year-on-year inflation hit 138.3%, and the total inflation for the first nine months of 2023 was 103.2%, according to Thursday’s report. The budget for 2023 forecasted a 60% inflation rate for the whole year.
Food and drink prices had the greatest impact on the index with a 14.3% increase, driven mainly by meats and their derivatives, bread, cereals, and fruits.
Clothes and footwear saw the biggest jump, rising by 15.7% which, according to the INDEC, was caused by the change in season. Recreation and culture — a category that includes books, magazines, newspapers, and cultural events — followed suit, mainly because of the increase in cable TV.
Hours after the inflation figure was published, the Central Bank raised the effective yearly benchmark interest rate from 118% to 133% in order to “strengthen the incentive to save in pesos,” according to a communiqué released on Thursday. This means that the effective monthly interest rate is 11%, which is still negative compared to the price hike. The Central Bank expects inflation to “slow down significantly” in October.
On September 15, following August’s record-high price hike, the Economy Ministry started publishing inflation figures every week.
The numbers are separate from the INDEC statistics bureau’s figures and are calculated by the Economic Policy Secretariat, led by Gabriel Rubinstein.
Following the publication of September’s inflation rate, which showed an increase since August, Rubinstein posted on X (formerly Twitter) that the monthly inflation rate dropped when considering the cumulative increase in prices from the last four weeks. According to his numbers, the figure went from 15% in August to 7.5% in September.
Consulting firms blame August’s and September’s record inflation on the devaluation carried out by the government on August 13. They described the move as disorganized and not part of a comprehensive plan.
Consultancy Ecolatina forecasts that an upcoming correction of the distortion of relative prices will have an immediate effect on inflation and food prices in particular. “We do not expect an improvement in 2024,” they wrote in a report.
The report also says that a “stabilization plan” that contemplates income policies, exchange rates, and the fiscal-monetary situation is essential to lower prices and improve living conditions.
Thursday’s report was the last before the presidential elections, scheduled for October 22. Prices are a hot-button issue in the presidential race, especially with Economy Minister Sergio Massa as the Peronist presidential candidate.
Juntos por el Cambio presidential candidate Patricia Bullrich took aim at Massa on X (formerly Twitter). “Economy Minister Sergio Massa leaves us a scorched earth with his incompetence,” she wrote. “We have a solid team, a plan developed by dozens of economists and majorities in Congress to put the economy in order.”
INDEC will publish October’s inflation rate on November 13: if there is a presidential runoff, the report would be published less than a week beforehand.
