By Horacio Soria and Miguel Lo Bianco
BUENOS AIRES (Reuters) – Argentina’s government is optimistic that its measures to curb one of the highest inflation rates in the world are working. However, buyers are not yet fully convinced.
The South American country is struggling with inflation that is running at nearly 290% on an annual basis and was 11% in March alone, official data showed on Friday.
However, that is down from the peak of 25% in December, when new libertarian President Javier Milei took office and sharply devalued the peso. Since then, he has pushed tough austerity and cost-cutting measures that have helped eliminate a deep budget deficit, attract investors and curb prices.
“Inflation is slowing sharply,” Economy Minister Luis Caputo wrote on Twitter on Wednesday. He has a social media account called @BotCoto
Opposition politicians have criticized Caputo for citing the bot and another similar account. Reuters could not immediately determine who was behind it.
Meanwhile, poverty is rising and economic activity has stalled, exacerbating hardship for millions of people. Prices of everything from food to health care are still rising steeply, even in U.S. dollars.
“There is no decline in inflation, it’s just words,” Maria Gen said as she shopped for fruits and vegetables at a market in San Fernando, on the outskirts of Buenos Aires, earlier this week.
“I took advantage of coming to the market because I thought the prices would be cheaper and they would be exactly the same as my neighborhood.”
Analysts and economists believe core inflation is showing signs of weakening. But 11% is still far higher than the price increase most countries see in a full year.
“Inflation is slowing sharply, but tariff increases (for utilities) are coming and that will prevent it from falling as much as it could,” Argentine economic analyst Aldo Abram said ahead of Friday’s data release. However, the government has “nipped in the bud” the risk of hyperinflation, he added.
Presidential spokesman Manuel Adorni told reporters on Thursday the government would curb inflation, although it was difficult to say how quickly.
“The end of inflation will be a reality,” he said. “When? Of course we don’t know because we don’t have a crystal ball.”
(Reporting by Horacio Soria and Miguel Lo Bianco; Editing by Adam Jourdan and Rosalba O’Brien)