Argentina's inflation cools, but woes linger on in daily lives

Argentina's chronic inflation is beginning to drop off, dipping to a five-year low early this year from triple-digit levels in the years during and after the COVID-19 pandemic. The government is celebrating the change, but it is yet to translate into real relief for people on the ground.

Argentina's yearly inflation fell to 84.5 percent in January in the wake of drastic and controversial austerity measures aimed at stabilizing the economy. Annual inflation peaked at close to 300 percent in April 2024 and the January number represented a significant drop from 118 percent in December.

The January number represented a five-year low, according to the National Institute of Statistics and Censuses of Argentina. Inflation had soared to 211.4 percent in 2023.

Argentina, a major agricultural exporter, experienced monthly inflation rates that hit as much as 25 percent in some months over the past few years — which meant that prices of everyday goods like flowers or coffee would jump by a quarter from one month to the next.

In January, Argentina reported a monthly inflation of just 2.2 percent.

Despite these encouraging inflation figures, more than a third of Argentina's population lives in poverty, following a severe recession that may have been caused by the government's austerity measures.

One of the Argentines still feeling the pain of inflation is lawyer Sonia Mereles, who helps her retired parents Norma and Rufino make ends meet. Mereles helps her parents pay for basic needs such as food and medicines over and above paying her own rent, which increases every three months to keep up with inflation.

"It is very difficult for a daughter to cover all the expenses such as rent, food and money to help my parents," Mereles told this correspondent. "I pay $300 for rent, and it increases every three months according to the inflation index. Aside from this, I spend over $100 per month on food."

Her mother Norma receives between $350 and $400 from her pension, while her father Rufino receives another $550 to $650 per month from his pension as a retired building manager.

That is roughly a thousand dollars every month for two people to pay toward rent, food, medicines, transportation, clothing, utilities like electricity and heating, phone and internet, the occasional outing, and any of the other necessities of life.

Mauro Galarza, a waiter who has worked for a decade at a cafe in Buenos Aires, said his salary rarely covers his needs and, of late, customers are not leaving tips that traditionally constituted a significant portion of his pay. Few customers can afford to tip when faced with rising restaurant bills.

"Before, we had fewer people entering the cafe, but now it has become a little more active because of neighbors in the area or workers. But when it comes to tips, they don't have more; and for us, a large part of the salary is made up of tips," Galarza said.

Argentina's restaurants and hotels have been forced to increase prices every month to keep up with inflation. That directly hits consumers who may no longer afford to go to a restaurant or cafe. Beef consumption, for which Argentines are famous, has dropped.

Others, like veterinarian Cecilia Mansilla, who owns her own business, are now picking and choosing what medicines to buy because they can no longer afford everything they actually need.

The writer is a freelance journalist for China Daily.