Argentina in economic collapse as annual inflation hits 113%
- Inflation has pushed 40% of the Argentinian population into poverty
- Economic collapse could see the far-right return to power under Javier Milei
If you think inflation is a problem in Britain, spare a thought for Argentine families.
The Bank of England is battling stubborn inflation, which fell in July but is still at 6.8 per cent – way above the 2 per cent target. And interest rates, which have been raised to 5.25 per cent, are expected to rise further.
But a look at South America shows it could be a lot worse. Argentina is locked in an economic collapse that could see the far-right return to power under Javier Milei, a rock-singing former sex coach who has threatened to abolish the central bank.
Javier Milei, a rock-singing former sex coach who has threatened to abolish the central bank
Governor Andrew Bailey has come under fire from politicians, but no-one has threatened to shut down the Old Lady altogether.
Annual inflation in Argentina is at 113 per cent, its highest in more than 30 years. It has pushed 40 per cent of the population into poverty as soaring prices outstrip wages.
The crisis escalated last week when the central bank raised interest rates to 118 per cent from 97 per cent to halt a sell-off in government bonds and the Argentine peso, which hit a record low against the dollar.
Inflation forced officials to devalue the peso by 18 per cent on Monday, which some economists expect to fuel inflation further, possibly sending it to 150 per cent.
The latest crash was sparked when Milei, a self-described ‘anarcho-capitalist’ and Donald Trump admirer, won the first round in the presidential elections.