Economic Crisis and Inflation in Argentina


Argentina is in an economic crisis and has an increasing inflation rate. The inflation of 104% has mainly occurred due to the rising price of food and drinks. One reason for the crisis is that the Peso is rapidly losing its value, which only adds to the growing prices of food and drinks. Currently, one Peso is equivalent to 0.055 Dollars. Economic activity has also been silent and since last year the economy has expanded 0.2% according to the National Statistics Bureau. An economy that isn’t expanding is not a good sign for Argentina to get out of the high inflation.

Another reason for the crisis is a massive draught that has hit Argentina and took a huge toll on agricultural industries. The Draught could cost Argentina’s government up to 19 million in US dollars. Argentina produces a lot of soybeans, wheat, and meat; the draught will not be good to produce any of these things.

The crisis is the worst Argentina has seen since the hyperinflation in 1991 which was over three decades ago.  The country has been in and out of recession for the last 10 years at its highest inflation rate since 1991. “The population doesn’t really trust or have any confidence in its own currency” Daniel Kerner said on an NPR interview which shows that the people are feeling the effects of the inflation. This also shows that people want change, and they want stability. People don’t want to be constantly worrying about changing prices and draught.

The government has tried to lower the inflation prices, but that has failed and may make some people lose faith in the current president. The next election is in October and if a new president gets elected, what they chose to do about the inflation may determine the support they get from the people.