Highest monthly CPI from goods and services in Argentina 2023

The Consumer Price Index gauges the price changes in a basket of goods and services in a defined time period. During January 2023, the product category with the highest Consumer Price Index (CPI) increase compared with the previous month in Argentina was recreation and culture with a nine percent. Followed by communication services with an eight percent increase. Nonetheless, when compared with the previous year clothing and footwear registered the highest price increase with over 120 percent year-over-year.

The expectation of inflation

Despite Argentina’s efforts to reduce inflation, the country ranks in the top three Latin American countries with the highest rate, only with a lower figure than Venezuela and Suriname. The situation is not a recent one, the inflation rate has been reaching double digits every year since 2012, reaching over 50 percent in 2019, making the constant rising prices nothing out of the ordinary for Argentinian families. The expectation of inflation is one of the main causes of inflation with low central bank interest-rates and increases in the money supply, which helps to explain the chronic inflation of the country. Both firms and people expect inflation in their lives, workers demand increasing wages to coop with inflation, while companies increase prices of goods and services because they expect production costs to grow, creating a vicious circle in the economy.

Inflation and poverty

Inflation negatively affects consumers and savers alike. For the latter, 100 Argentinian pesos in 2020 was worth just under 52 pesos in 2021, after adjusting for the 48.41 percent inflation rate. For the consumers, rising prices of the basic products increase the vulnerability of the population. In January 2023, the value of the basic food basket, which establishes the extreme poverty line, stood at 23,315 pesos, more than ten times higher than during the same month in 2018. Between the first half of 2018 and the first half of 2022, the share of households under the poverty line increased by over 8 percentage points reaching 27.7 percent.