Argentina has become the country with the highest inflation in the world

Argentina closed in 2023 with the highest inflation in the world, higher than countries such as Venezuela or Lebanon, according to official data for each country.

While Lebanon experienced 192% inflation in 2023, Argentina exceeded this figure by 211.4%, According to the National Institute of Statistics and Census (INDEC).

This is a number the highest rate since the hyperinflation of 1989-1990.after reaching 94.8% in 2022.

In contrast to the situation in Argentina, in Lebanon inflation was 0.02% in December, resulting in annual price increases of 192.3%.

Venezuela ranked third in the world with 189.8% annualized inflation. according to official data, and 193% According to the Venezuelan Financial Observatory (OVF). In the region, no Spanish-speaking country in Latin America, with the exception of Argentina and Venezuela, has inflation exceeding 10%.

Bye Chile (3.9%), Brazil (4.62%) and Paraguay (3.7%) managed to successfully contain the inflationary process.

Despite these figures, the overall economy of Latin America and the Caribbean low growth recorded in 2023, which, according to preliminary data from ECLAC, was only 3.8%, which is significantly lower than 8.2% in 2022, and forecasts for this year show that if geopolitical tensions and rising food and fuel prices continue the inflationary trend may intensify.

Daniel Titelman, Director of the Economic Development Division of the Economic Commission for Latin America and the Caribbean (ECLAC), explains EFE that the inflationary process is “subject to what is happening to energy and food prices, which, in turn, depends on the fact that geopolitical tensions in the Middle East do not increase, or on the impact of meteorological factors such as El Niño and La Niña.”

Chronic inflation

Argentina, Venezuela and Cuba are exhibiting”chronic inflation problems, high and persistent inflation rates over time“, says the ECLAC expert.

Cuba ended 2023 with interannual inflation 31.34% in the official market, up from 39.07% in 2022, according to the National Office of Statistics and Information (ONEI).

Jaime Dunn de Avila, Bolivian economic analyst and academic, comments EFE that although inflation has increased due to food and energy, The policy of “slow” control is working on him.

Moreover, he predicts that Latin American economies will continue to “with a chin strap (mask), with high percentages.”

Year of achievements

Brazil, the Latin American giant, ended 2023 with an inflation rate of 4.62%. youngest in three years (in 2022 it was 5.79%) and below the Central Bank ceiling (4.75%).

Chile managed to reduce inflation to 3.9% at the end of 2023 after reaching 12.8% in 2022. one of the most noticeable cuts in the region.

Mexico, another major regional economy, managed to join the downward trend. finishing 2023 with 4.66%after 7.82% in 2022.

The countries of Central America were located on the same line. Costa Rica ended the year with a negative inflation rate of -1.77%. up from 7.88% in 2022; El Salvador with 1.23% (7.32% in 2022) and Panama with 1.5% (2.9% in 2022), Guatemala with 4.18% (9.2% in 2022) , Honduras with 5.19% (9.80% in 2022) and Nicaragua with 5.6% (11.59% in 2022).

Paraguay also stands out, finishing 2023 with inflation 3.7%which is below the official target of 3.8% and well below 8.1% in 2022.

Ecuador with its dollarized economy, As highlighted by Dunn, he reported “subdued macroeconomic stability”, reporting inflation of 1.4% in 2023 (3.74% in 2022).

While in Bolivia, where the rate increased from 3.12% in 2022 to 2.12% in 2023, It benefits from a policy of controlling the dollar under a fixed exchange rate. which forces the country to exert a little more control over this so-called “silent tax on the poor,” the Bolivian analyst adds.

So much Uruguay and Dominican Republic reached target range are set by the respective central banks. The former managed to record inflation at 5.11% in 2023 (8.29% in 2022), and the latter at 3.57% (7.83% in 2022).

Inflation in Peru closed 2023 at 3.41% (8.56% in 2022), noticeable drop that Peruvian economist and newspaper columnist Trade Enrique Castellanos attributes this to experience.

“Peruvian history hyperinflation “He taught us to behave,” he says. EFE.

For Colombia, the situation has softened a little reaching 9.28% last year, 3.84 percentage points lower than the figure recorded in 2022 (13.12%, the highest in 23 years).

Forecasts for 2024

In its recent World Economic Situation and Prospects (WESP) 2024 report, the UN warns that new inflationary pressures may arise in the region due to instability in global financial markets, which could impact capital inflows, as well as unforeseen decisions by the US Federal Reserve or escalating geopolitical conflicts, among other factors.

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The paper predicts that Annual inflation in Latin America and the Caribbean will reach 4.3% in 2024excluding the economies of Argentina and Venezuela, countries that are expected to register much higher rates.

On the other hand, an ECLAC report last December indicated that the region’s median inflation in 2023 would be 3.8%, “much lower than the 8.2% recorded in 2022.” The UN regional agency predicts that the decline will continue in 2024 and the regional average inflation rate is expected to be 3.2%.”

According to Bolivian economist Jaime Dunn of Avila, Chile, Peru and Paraguay “are going to do a great job of containing inflation, which will be rewarded attracting foreign investmentThis will allow them to diversify their economy and at the same time become a ‘virtuous circle’ that will help them maintain low inflation through increased production, increased investment and increased foreign exchange inflows,” he details.

(according to information from EFE)