Annual inflation hits 143% before election

Inflation in Argentina accelerated last month to its highest annual level since the country was exiting hyperinflation more than three decades ago, highlighting the dire state of the economy ahead of the presidential election later this week.

Consumer prices rose 8.3 percent in October on a monthly basis, a notch below September’s figure and less than the 9.45 percent median forecast of economists surveyed by Bloomberg. From a year ago, annual inflation accelerated to 142.7 percent, according to official government data published Monday, also slightly below projections.

Communication, clothing and home goods led price increases in October.

Argentines will choose their next president on November 19 in a run-off vote between Economy Minister Sergio Massa and libertarian outsider Javier Milei, who is proposing closing the Central Bank and dollarising the economy as a drastic solution to thwarting triple-digit price increases.

Argentina’s dollar bonds due 2035 fell to a session low after the report’s publication. The notes fell as much as 0.2 cent to around 26.1 cents on the dollar, their lowest in almost a week, according to indicative price data compiled by Bloomberg.

Regardless of who wins the consequential vote, inflation will be the biggest immediate challenge for Argentina’s next leader. Rickety currency controls have proven unsustainable, meaning a major currency devaluation is on the horizon for the next government taking office December 10. At the same time, narrowing a chronic fiscal gap implies cutting subsidies that will make utility prices spike.

Economists see annual inflation near 200 percent over the next 12 months, according to the average forecast from the Central Bank’s last monthly survey.