Argentina’s monthly inflation rate reached 25.5% in December 2023, according to the National Institute for Statistics and Census (INDEC, for its Spanish acronym). The figure, which more than doubles November’s rate, is the first to reflect part of President Javier Milei’s administration and last month’s 54% devaluation. The inflation rate, published on Thursday, is the highest since February 1991.

Cumulative inflation for 2023 was 211.4%, the country’s highest interannual price hike since 1990. It was also the highest 2023 inflation rate in Latin America, surpassing Venezuela’s which was 193% according to the Venezuelan Finance Observatory.

On Sunday, Milei said that if inflation for December was 30%, that would be a numerazo — a fantastic number. “It is dreadful, of course, but we were going for 45%. If we get it to 30 it is a phenomenal achievement, we have reduced it by a third in a month,” Milei said in an interview with Radio Mitre, without specifying where the projected 45% figure came from. Before he took office, the Central Bank monthly market expectation survey (REM, by its Spanish initials) put December’s inflation at 17.1% — almost two-thirds lower.

“If it is 30, people should take [Economy Minister Luis] Caputo on their shoulders,” he added.

The economic sector that saw the biggest increase was “other goods and services” which includes toiletries, personal care services, and other miscellaneous categories. It went up by 32.7%. It was closely followed by a 32.6% increase in health, driven by price hikes in medicines and prepaid medicine. Transportation went up by 31.7% due to increases in gasoline.

Food and non-alcoholic beverages have the highest impact on the inflation rate given the category’s influence on the index. They went up by 29.7%, driven by increases in meat and their derivatives, bread and cereals.

Some of the products that increased the most were lemon (68.7%) sunflower oil (56.6%) rice (52.6%) wheat flour (52.3%) canned tomato (51%) diapers (45.8%) liquid detergent (48.8%) and beef ribs (43.6%).

A report by the Center of Argentine Economic Politics (CEPA, by its Spanish acronym) said that the 118% exchange rate jump was the main reason behind December’s inflation rate. The report added that some prices had however been adjusted to the value of the parallel dollar rate. The deregulation of the fuel market caused an 80% increase in gasoline prices, and the end of price agreements also contributed to higher food prices.

Another report by the Ecolatina consulting firm said that inflation will average a monthly 20% between December and March and that real salaries will fall by 10% in that period. It added that the scenario would imply a recession. 

“In order for purchasing power not to be eroded in the coming months, wages will have to keep up,” the report said. However, it warned that if salaries are adjusted to inflation, the inflationary inertia could trigger a price-wage spiral.

Anticipating the figure, presidential spokesman Manuel Adorni blamed Alberto Fernández’s government. “Every point of inflation is the responsibility of the previous administration,” he said in his daily press conference on Thursday, and added that people who blame Milei are being “childish or naive.”