For the first time in 30 years, Argentina experienced a zero-percent increase in the inflation rates of food and drinks during the third week of June, President Javier Milei confirmed on Monday morning.
A study published on Sunday by Econométrica, a private Argentine consulting firm, first reported the no-inflation week. In its study, Econométrica analyzed 8,000 prices in local online supermarkets and found no change when compared to the preceding week — something that has not happened in Argentina in three decades. In addition to the lack of variation in prices in one week, the study found that the prices of food and drinks only experienced an increase of 0.1 percent in the past 15 days.
President Milei, who is currently in Prague, confirmed the study’s findings on Monday morning in a telephone interview held with Argentina’s Radio Mitre, celebrating the news as a result of his economic policies.
“That means that we are on the right path — which there is still a long way to go, but the first signs that things are working are beginning to appear,” Milei told Argentine journalist Eduardo Feinmann.
“I sometimes present it, explain it, but, well, I have encountered in recent times gross levels of intellectual dishonesty. Because we all know that wholesale inflation is the one that predicts and anticipates retail inflation and the reality is that inflation in December when we arrived was 54 percent, that annualized gives 17,000,” he continued.
Milei added, “it also speaks of the misery or incompetence of other colleagues, doesn’t it? But the truth is that there is no country in the world where we are not recognized for our titanic task in terms of lowering inflation.”
Upon taking office in December, Milei enacted a series of “shock therapy” economic policies to restore Argentina’s economy after nearly two decades of socialist rule left it in a precarious state and on the verge of a hyperinflation spiral.
Since then, monthly inflation rates in Argentina have experienced a dramatic and continued downward trend, going from 25.5 percent in December to 4.2 percent in May, the lowest rate experienced in the country in over two years. In April, Argentina recorded a surplus of its gross domestic product (GDP) during the first quarter of the year — something that the South American nation had not seen since 2008.
Milei is in the Czech Republic on the final stop of a four-day tour of Europe that began on Friday with a visit to Spain, followed by a two-day stop in Germany over the weekend that included an encounter with German Chancellor Olaf Scholz. Milei is slated to meet with Czech Prime Minister Petr Fiala on Monday morning.
The Argentine president described the tour during his Monday morning interview as an “excellent trip so far, extremely positive.”
“The German Minister [Scholz] asked us about how the economic program was working, given that he carries weight within the International Monetary Fund, and about the prospects for the future,” Milei said. “We also talked about some problems that German companies have had in Argentina and how we were progressing in the solution of such problems.”
“We also discussed issues related to natural resources that are extremely important for Germany and that this would motivate many investments in Argentina,” Milei continued, “and we discussed Argentina’s entry into the OECD [Organisation for Economic Co-operation and Development], NATO, and the integration between Mercosur and the European Economic Community. It was a very productive meeting.”
Milei also confirmed that his administration would not promote a devaluation of the Argentine peso, echoing statements by Economy Minister Luis Caputo last week where he ruled out such plans. Caputo instead said he would continue implementing the current plan, which focuses on maintaining a good relationship with the International Monetary Fund (IMF) and upholding a currency exchange system that allows companies to sell 20 percent of their income in U.S. dollars in the financial market and settle the remaining 80 percent at the official exchange rate.
“There are professionals who, in order to justify and wash their mistakes, make unfortunate arguments, which speak more about what they want to happen than what really has to happen,” Milei said. “There are sectors that find it convenient to have low dollar salaries and more poor and indigent people, and we believe that the situation works in a different way.”
Christian K. Caruzo is a Venezuelan writer and documents life under socialism. You can follow him on Twitter here.
