Argentina’s inflation rate hit 6.7 percent last month, the highest figure in 20 years. In just the first quarter of the year, prices have risen 16.1 percent.
Annual inflation since the previous March is 55.1 percent. The March figure was the highest recorded since the 10.2 percent of April, 2002, the product of a major devaluation as the country came out of convertibility.
The data, announced by the INDEC national statistics bureau, was published just hours after street demonstrations pressing for more government aid, jobs and food had taken place across the country, centring on the capital.
Key items like food and beverages rose 7.2 percent last month, but there were even steeper increases for education (23.6 percent), garments and footwear (10.9 percent) and housing, water, electricity and gas (7.7 percent).
Reflecting growing social discontent, thousands of demonstrators marched on the Casa Rosada, calling on President Alberto Fernández to create jobs and expand state assistance.
Demonstrators gathered at the historic Plaza de Mayo square with banners demanding "real work" and increased support for soup kitchens, among other assistance.
"Things are looking bad, the economy is getting out of hand with this government," Mario Almada, a 60-year-old bricklayer who works in a social cooperative and is a beneficiary of social aid, told AFP.
He said his monthly earnings and government subsidy put together was "not enough to buy food."
Almada receives around 16,000 pesos a month (US$136 at the official exchange rate) via welfare but he said in his neighbourhood of Florencio Varela, on the southern outskirts of Buenos Aires, "the money is going away like water."
"This is starting to look a little bit like the time of [former president Raúl] Alfonsín" in the 1980s, he says, citing a period of economic turbulence that led to a crisis with hyperinflation.
Prices, he added, "increase every four or five days. The noose is tightening."
A disruptive war
The inflationary surge had been anticipated by Economy Minister Martín Guzmán, who at the start of the week had said that March inflation would top six percent.
The minister underlined: "The world is experiencing its worst inflationary process in decades. The ongoing war [in Ukraine] is strongly disrupting the entire productive chain."
At the same time he maintained that he needed more political support for his economic plans to take effect at a time when the ruling coalition is divided by the recent agreement with the International Monetary Fund (IMF).
"Inflation is attacked with macroeconomic policy and for that two things are needed: one is an economic programme, which we now have, but the other is political support because the economy does not function in a vacuum. If the politics are disordered, it is much more difficult to accomplish anything," declared Guzmán in a television interview.
Argentina recently agreed an Extended Fund Facility credit programme with the IMF for US$44.5 billion. It contemplates an important reduction of the fiscal deficit from three percent of gross domestic product in 2021 to 0.9 percent in 2024 and projects an inflation rate of between 38 and this year – a figure that already looks out of reach.
The agreement was approved by Congress although a sector of ruling Frente de Todos coalition close to Vice-President Cristina Fernández de Kirchner voted against it.
Economist Víctor Beker, director of the Centro de Estudios de la Nueva Economía at the private Belgrano University, attributed the surge in inflation to the impact of the increases expected for energy and education but also to the effect of "rising commodity prices due to the war in Ukraine."
"As if that were not enough, President Alberto Fernández announced a 'war on inflation,' triggering preventive price mark-ups for fear of a freeze," he added.
Within this framework the Central Bank on the same day raised its reference interest rate by 250 basis points, passing from an annual 44.5 to 47 percent in the case of its Leliq (Letras de Liquidez) bonds or an annual yield of 58.7 percent, according to their communiqué.
"The Central Bank, in coordination with the government, will use all its tools towards contributing to softening the inflationary effects of the commodities shock," indicated the bank, adding: "It is hoped that inflation will start gradually slowing down as from April and May."
Private analysts are doubtful.
Seeking to compensate for the price hikes, the government last week renewed its ‘Precios Cuidados’ price control plan for basic products, in existence since 2013, while also creating a fund to stabilise the domestic prices of wheat flour.
Already in February the government had increased its assistance for food purchases, received by some 2.4 million beneficiaries, by 50 percent, taking it to a monthly 6,000 pesos (US$50) per person.
For Wednesday's protesters, it is not enough.
"Let them explain to me who can live with that," said Lucas, another beneficiary of subsidies.
Last week, several thousand took to the streets and hundreds camped out on Avenida 9 de Julio, the capital's main thoroughfare, pressing the same demands.
Argentina’s economy grew 10.3 percent in 2021 after over two years of recession but that figure is overshadowed by the high inflation eroding purchasing-power and by poverty reaching 37 percent of the population.