Argentina’s Economy Ministry has lifted the ban on businesses displaying prices in U.S. dollars alongside peso prices, allowing for flexible exchange rate conversions. Simultaneously, the Central Bank announced that Argentinian debit cards will facilitate payments in both dollars and pesos, bypassing peso conversion for domestic transactions. This dual-currency system, slated for implementation by April 1st, will initially be adopted by select businesses before wider implementation. The changes aim to integrate the dollar more fully into the Argentine economy, though credit cards remain excluded from the immediate changes.
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Argentina’s poverty rate, peaking at 52.9 percent in the first half of 2024, has shown improvement, according to various reports. Estimates place the rate as low as 36.8 percent by year’s end, driven by decreased inflation and wage recovery. However, experts caution against complacency, citing a worsening of scarcity and the risk of entrenched poverty amongst low-income groups. While differing methodologies yield slightly varying results, all reports indicate a significant decrease in poverty from its recent peak. The official figures will be released in mid-March.
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Argentina’s November inflation rate reached a four-year low of 2.4%, a significant decrease from October’s 3% and a continued decline since December 2023’s 25.5% spike following a peso devaluation. While year-to-date inflation remains high at 112%, the sectors with the largest monthly price increases were education, housing and utilities, and food and beverages. The government celebrated this drop as a step towards inflation stabilization, a claim echoed by President Milei.
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John Q. Hosedrinker