Argentina is world country with the fourth-highest inflation
UI RIO DE JANEIRO, BRAZIL – The latest World Economic Outlook report of the International Monetary Fund, released on Tuesday (12) in Washington, DC, states that “inflation is frightening”, about the acceleration of prices worldwide, mainly due to the supply problems caused by the pandemic.
It should be clarified that the IMF does not include inflation forecasts for Argentina because it is considered that the estimates are subject to ongoing negotiations, which is why for comparison, the latest data from the Relevamiento de Expectativas de Mercado (REM) conducted by the Central Bank among the leading consulting firms were used, which shows a projection of 48.4% for the current year.
In this context, Argentina is still not far behind, since a ranking of countries with double-digit inflation – only 26 out of 200 – has the country in fourth place, according to a report prepared by Ambito based on this report.
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This percentage is only surpassed by Venezuela – 2,700%-, Sudan -115.5%- and Suriname -48.6%- and is not far from Yemen -45%- and Zimbabwe -41%-.
Excluding Venezuela, the average inflation in the Latin American and Caribbean area -9.7%- would represent less than a quarter of the increase that Argentina would register this year.
What “scares” IMF technicians is that annual inflation in advanced economies is forecast to reach a maximum of 3.6% on average in the last months of this year, thus breaking three decades of low rates.
The good news is that the multilateral organization projects that in developed nations, inflation will return to a 2% pace in the first half of 2022, i.e., a level in line with central bank targets. A faster rise is forecast for emerging markets, reaching average annual inflation of 6.8%, then slowing to 4%.
The projections, however, come with “considerable uncertainty,” according to the Fund, and warn that inflation may be elevated for longer. Factors that could play into this include:
- rising housing costs,
- supply shortages,
- rising food prices,
- exchange rate depreciations in emerging markets.
It is noted that food prices worldwide increased by about 40% during the pandemic.
Contrary to the slowdown in inflation on which the IMF is counting, price increases in Argentina will remain at high levels, at least according to the forecast of the consulting firms for 2022: 46.2% and -if it is fulfilled- it is likely to reach a new position at the top of the table of the most unstable countries.
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This article was produced by The Rio Times’ automated newsroom system. How we use AI · Report an error · Editorial responsibility: Matthias Camenzind, Editor-in-Chief