Monthly inflation in economically struggling Argentina hit a two-and-a-half-year low of 4.2% in May, mainly due to lower consumption, statistics agency INDEC said on Thursday.
The viewership rating for the first five months of 2024 was 71.9%, or 276.4% compared to the same period last year, down from April’s registration rate of 289.4%, but still at an all-time high.
In May, it showed a decline for 5 consecutive months.
When President Javier Millais took office last December with deep budget cuts, the peso was devalued by more than 50% and inflation soared 25.5%.
Mailay, a self-described “anarcho-capitalist,” has pledged to halt Argentina’s economic decline and reduce its budget deficit to zero.
He cut public spending, halved the cabinet, eliminated 50,000 public jobs, halted new public works contracts and ripped up fuel and transport subsidies.
In April, Prime Minister Maillay welcomed the South American country’s first quarterly budget surplus since 2008.
Economy Minister Luis Caputo celebrated the May figures on Thursday as indicating a “deepening of the ongoing process of reducing inflation.”
– ‘Consumption significantly decreased’ –
Critics say Miley’s several victories have come at the expense of the poor and working class and will not last.
Hernan Letcher, an economist at the CEPA economic think tank, told AFP that most of the fall in inflation was explained by a “significant decline in consumption”.
“Our consultants do not expect the process of lowering the inflation rate to continue in June,” he said.
“Market expectation survey results show that the 5% level will be maintained until the end of the year.”
Consumer spending, manufacturing and construction slumped, with economic activity contracting 5.3% in the first quarter due to Mailay’s peso devaluation and budget cuts.
The International Monetary Fund (IMF) predicted that Argentina’s economy will contract by 2.8% this year, following a 1.6% contraction in 2023.
This week the government reported that private sector real wages rose 16% in April and a recovery in purchasing power, ‘the most significant since 2009’.
But these are relative figures in a country where informal employment accounted for more than 45% of the workforce even before Mailay’s austerity measures hit the country.
The South American country’s poverty rate currently stands at 55.5%, according to the Pontifical Catholic University’s Social Debt Monitor.
Last month, Argentina issued a 10,000-peso note worth about $11, five times the face value of the previous largest 2,000-peso note.
Thursday’s inflation data comes hours after Maillay’s first victory in the Senate, which approved a modified version of the economic liberalization package.
Mailay’s bill, which sets out provisions for the privatization of state-owned enterprises and weakens labor protections, sparked outrage from workers and leftists who battled police outside parliament on Wednesday.
The draft bill must receive final approval from the lower house of parliament.
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