BUENOS AIRES, Argentina (AP) 鈥� Argentina鈥檚 monthly inflation rate eased sharply to a single-digit rate in April for the first time in half a year, data released Tuesday showed, a closely watched indicator that bolsters President Javier Milei鈥檚 severe austerity program aimed at fixing the country鈥檚 troubled economy.
Prices rose at a rate of 8.8% last month, the Argentine government statistics agency reported, down from a monthly rate of 11% in March and well below a peak of 25% last December, when with a , among the highest in the world.
鈥淚nflation is being pulverized,鈥� Manuel Adorni, the presidential spokesperson, posted on social media platform X after the announcement. 鈥淚ts death certificate is being signed.鈥�
Although praised by the International Monetary Fund and cheered by market watchers, Milei鈥檚 cost-cutting and deregulation campaign has, at least in the short term, whose money has plummeted in value while the cost of nearly everything has skyrocketed. , the statistics agency reported Tuesday, climbed slightly to 289.4%.
鈥淧eople are in pain,鈥� said 23-year-old Augustin Perez, a supermarket worker in the suburbs of Buenos Aires who said his rent had soared by 90% since Milei deregulated the real estate market and his electricity bill had nearly tripled since the government slashed subsidies. 鈥淭hey say things are getting better, but how? I don鈥檛 understand.鈥�
Milei鈥檚 social media feed in recent weeks has become a stream of good economic news: Argentine bonds posting some of the best gains among emerging markets, officials celebrating its first quarterly surplus since 2008 and the Monday it would release another $800 million loan 鈥� a symbolic vote of confidence in .
鈥淭he important thing is to score goals now,鈥� Milei said at an event Tuesday honoring former President Carlos Menem, a divisive figure whose success driving hyperinflation down to single digits through free-market policies Milei repeatedly references. "We are beating inflation.鈥�
Even so, some experts warn that falling inflation isn鈥檛 necessarily an economic victory 鈥� rather the symptom of a painful recession. The IMF expects Argentina鈥檚 gross domestic product to shrink by 2.8% this year.
鈥淵ou鈥檝e had a massive collapse in private spending, which explains why consumption has dropped dramatically and why inflation is also falling,鈥� said Monica de Bolle, a senior fellow at the Peterson Institute for International Economics who studies emerging markets. 鈥淧eople are worse off than they were before. That leads them to spend less.鈥�
Signs of an economic slowdown are everywhere in Buenos Aires 鈥� the lines snaking outside discounted groceries, the empty seats in the city鈥檚 typically booming restaurants, the .
At an open-air market in the capital's Liniers neighborhood, Lidia Pacheco makes a beeline for the garbage dump. Several times a week, the 45-year-old mother of four rummages through the pungent pile to salvage the tomatoes with the least mold.
鈥淭his place saves me,鈥� Pacheco said. Sky-high prices have forced her to stick to worn-out clothes and shoes and change her diet to the point of giving up yerba mate, brewed from bitter leaves. 鈥淲hatever I earn from selling clothes goes to eating,鈥� she said.
Argentina's retail sales in the first quarter of 2024 fell nearly 20% compared to the year before, a clip comparable to that of the 2020 pandemic lockdowns. The consumption of beef 鈥� an Argentine classic 鈥� dropped to its lowest level in three decades this quarter, the government reported, prompting panicked editorials about a crisis in Argentina's national psyche.
鈥淣ow I buy pork and chicken instead,鈥� said Leonardo Buono, 51-year-old hospital worker. 鈥淚t鈥檚 an intense shock, this economic adjustment.鈥�
Milei, a self-proclaimed 鈥渁narcho-capitalist鈥� and former TV personality, warned his policies would hurt at first.
He to symbolize all the cutting he would do to Argentina鈥檚 bloated state, a dramatic change from successive left-leaning that ran vast budget deficits financed by printing money.
Promising the pain would pay off, he slashed spending on everything from construction and cultural centers to education and energy subsidies, from soup kitchens and social programs to pensions and public companies. He has also devalued the , helping close the chasm between the peso鈥檚 official and black-market exchange rates but also fueling inflation.
Inflation in the first four months of 2024 surged by 65%, the government statistics agency reported Tuesday. Prices in shops and restaurants have reached levels similar to those in the U.S. and Europe.
But Argentine wages have remained stagnant or declined, with the monthly minimum wage for regulated workers just $264 as of this month, with workers in the informal economy often paid less.
Today that sum can buy scarcely more than a few nice meals at Don Julio, a famous Buenos Aires steakhouse. Nearly 60% of , a 20-year high, according to a study in January by Argentina鈥檚 Catholic University.
Even as discontent appears to rise, the president鈥檚 approval ratings have remained high, around 50%, according to a survey this month by Argentine consulting firm Circuitos 鈥� possibly a result of Milei鈥檚 success blaming his predecessors for the crisis.
鈥淚t鈥檚 not his fault, it鈥檚 the Peronists who ruined the country, and Milei is trying to do his best,鈥� said Rainer Silva, a Venezuelan taxi driver who fled his own country鈥檚 economic collapse for Argentina five years ago. 鈥淗e鈥檚 like Trump, everyone鈥檚 against him.鈥�
Argentina鈥檚 powerful trade unions and leftist political parties have pushed back against Milei with weekly street protests, but haven鈥檛 managed to galvanize a broad swath of society.
That could change 鈥� last week, a to public universities visibly hit a nerve, drawing hundreds of thousands of people.
鈥淭he current situation is completely unsustainable," said de Bolle, the economy expert.
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Associated Press writer Almudena Calatrava contributed to this report.
Isabel Debre, The Associated Press
