Argentines tighten wallets to fight spiraling inflation

3:32 pm Thursday, July 13th, 2023

BUENOS AIRES (Reuters) -Argentines are tightening their wallets to make end meets as the South American country battles inflation which could surpass 140% on an annual basis this year, hunting for the cheapest prices on basic goods to shield their income.

Inflation in the 12 months through June hit 115.6%, official data showed on Thursday.

Meanwhile Argentina’s monthly inflation rate stood at 6.0% in June, the national statistics office INDEC said, beating forecasts of 7.0% and slowing from 7.8% the previous month.

While Argentines are on track this year to keep up their high steak consumption, higher prices are taking a bite out of their selections.

“Customers are being more careful about what they spend and generally choose the cheapest meats, such as ground beef or cuts to make steak or meat for stews,” said 51-year-old butcher Gabriel Segovia, whose shop is among those at a fair in Buenos Aires where buyers hunt for better prices.

The economic crisis, which has worsened over the past year, has plunged some 40% of the population below the poverty line and will be a key issue in the upcoming presidential primaries set for Aug. 13, with Economy Minister Sergio Massa seeking to become the ruling party’s candidate for the October election.

“I feel there is no control, no one controls the prices and everyone sets the price they want,” added 31-year-old Annabella Paez while shopping at the capital city market.

Analysts forecast that annual inflation could close this year at 142.4% compared to 94.8% last year, according to a central bank poll, steadily cutting away at consumers’ purchasing power in Latin America’s third-largest economy.

Meanwhile, an Argentine delegation is meeting with the International Monetary Fund this week to renegotiate its $44 million loan, a source earlier told Reuters. The country is seeking adjustments as rising inflation, a weakening peso and a historic drought hamper exports and financial reserves.

An IMF spokeswoman on Thursday acknowledged the talks but gave few details.

(Reporting by Horacio Soria and Candelaria Grimberg; Writing by Sarah Morland; Editing by Susan Heavey and Diane Craft)