As the world begins to look at the tensions caused by rising prices in the economy, Argentina is facing sixteenth year of double-digit inflation. By 2022, the market forecast is that the price index will end above 60%. If this is fulfilled, it will be the year with the highest increase since 1991, when the record was 84%.

Over the past 100 years, the average inflation rate in the country is 105% per year, according to a survey by the Argentine Chamber of Commerce (CAC). The peak occurred during the hyperinflation of 1989, when INDEC was marked 3079%.

To measure price increase, Clarín created a calculator that lets you see from 1945 onwards, what inflation is each year.

Throughout Argentina’s history, there have been some periods where the turmoil of inflation has not been felt. The most memorable was Convertibility, when between 1992 and 2001 rising prices were reduced, by tying the peso to the dollar in a manner that would end in burst from 1 to 1, 50% poverty and 25% unemployment.

Over the past 77 years few presidents have faced high rates of inflation. In 1959, during the presidency of Arturo Frondizi and amid the sermon of his Minister of Economy, Alvaro Alsogaray, that “spend the winter” he was for the first time we had triple-digit annual inflation: 113%.

On the podium of the leaders with the highest annualized inflation during their administration were Reynaldo Bignone with 401%, Raúl Alfonsín with 398%and María Estela Martínez de Perón with 276.2%.

Three dictators complete the list of presidents with triple-digit average annual inflation during their term: Roberto Eduardo Viola with 148.6%, Jorge Rafael Videla with 147.0%, Leopoldo Fortunato Galtieri with 104.4%.

The 1980s were the most complex period in terms of inflation. The devaluation was such that the currency was changed twice: in 1983 the Ley Peso was replaced by the Argentine Peso and in 1985 the latter was replaced by the Austral.

The highest annual inflation was recorded in 1989 with 3079%, under the leadership of Raúl Alfonsín in the first part of the year and Carlos Menem in the second. That hyperinflation coincided with a historic devaluation: the exchange rate registered an increase of 4771% per year against the dollar.

After two years of high inflation, Menem along with his minister Domingo Cavallo launched the Convertibility plan that led the country a decade without inflation. But at the same time, excessive indebtedness, rising public spending and the opening of trade without restrictions have plunged industry and employment.

During the two years of Fernando de la Rúa’s rule and the economic downturn, the price variation is negative, with an annual rate of -1.1%. After the 2001 explosion, the devaluation in 2002 meant that in that year the price index reached 40%.

Inflation dropped between 2003 and 2006 amid economic growth at Chinese rates. During Néstor Kirchner’s presidency, the commodity boom allowed revenues to rise and reach double surpluses, with favorable balances in the trade balance and in the fiscal balance.

Beginning in 2007, inflation began to rise. Cristina Kirchner’s government appealed to statistical blackout and manipulate indices to hide multiplication.

Under Mauricio Macri’s administration, inflation remained a central issue and in 2019 got 53%so far the highest record since 1991.

In 2020, pandemic and lockout helped flatten the curve and the index closed 36%. But it climbed again last year to 50.9%. For this year it is expected to be at least 60%.

Why is inflation endemic in Argentina?

From the orthodox view, economists point out that the public deficit is the key to perpetual inflation. In the last 60 years, there have been 54 where accounts have ended in red, where the country spends more than it earns.

The deficit leads to the widening of the financial issue, which in turn leads to a decrease in the value of money. It came from thatArgentines are removing the peso spending or converting them into dollars. The tendency to save on the dollar exacerbates the problem because foreign exchange entering the country is not enough to cover demand and drives devaluation, which in turn feeds back price increases.

The current government follows another view: inflation is multicausal. From heterodoxy they marked that prices rose due to distributive bid, economic concentration, speculation of traders, the imbalance between supply and demand and the evolution of the exchange rate, among other reasons.

A report conducted by the Ferreres Study points out that throughout local history, “successful attempts to control inflation have had as common elements and essential foundations the adoption of a fixed exchange rate, supported issuance of foreign exchangefinancial balance and the use of a prudent monetary policy ”.

AQ