Think inflation is bad in Australia? Try Argentina’s 95 per cent

Runaway inflation in Argentina is forcing shoppers to act ‘like James Bond’, volunteering to police stores’ adherence to government-imposed price caps.

Monica Schenone, a member of the Movimiento a la Dignidad (Movement for Dignity) checks the prices of the Precios Justos program, at a supermarket in Buenos Aires. Picture: AFP

Like a veritable undercover agent, Monica Schenone tries to pass unnoticed through the aisles of a supermarket in Buenos Aires, sneaking photographs of price tags.

The 52-year-old homemaker is part of a group of ordinary Argentines who volunteer their time to police stores’ adherence to price limits suggested by the government to curtail spiralling inflation.

She feels “like James Bond,” Schenone says, as she tries to blend in with shoppers in the capital of Argentina — which in 2022 recorded its highest inflation rate in three decades at 94.8 per cent — one of the highest in the world.

Prices for daily staples rose monthly, even weekly in 2022, with milk prices climbing more than four-fold and those for cooking oil and sugar more than five-fold, according to the Abeceb economic consultancy.

In a bid to rein in galloping price rises, the government’s “Precios Justos” (Fair Prices) program applies a 3.2 per cent monthly price hike limit to some 2000 essential products including flour, rice, milk and sunflower oil.

“I am in shock,” Schenone told AFP as she exited a supermarket in the San Cristobal neighbourhood where she had executed a covert price check she said left her horrified.

“A bar of soap that went from 231.40 pesos ($1.75) to 496 pesos ($3.75), that does not seem to me to be a three per cent increase,” she said.

“It seems to me that we are still being taken for fools.” Precios Justos runs from February to the end of June, and covers food and medicines but also soap, clothing, shoes, and school gear, among other items.

Joining is voluntary, but producers and vendors who do sign up to the price agreement risk fines for noncompliance of up to 71 million pesos ($536,000) from Argentina’s ministry of commerce.

Precios Justos, states the government, “aims to reduce inflationary expectations and … recover the purchasing power of the population’s income.” All major supermarket chains as well as Argentina’s massive COPAL food and drinks producers’ group have signed up to the program.

But most smaller, independent stores which serve millions of Argentines remain outside of the framework, sometimes charging prices double the suggested rate, according to consulting firm Nielsen IQ.

“It seems to me that we are still being taken for fools,” Monica Schenone says. Picture: AFP

‘Impotence’

Schenone and about two dozen others members of an activist group called “La Dignidad” (Dignity) have taken it upon themselves to check up on Precios Justos compliance in Buenos Aires.

She said they regularly observe serious breaches.

Most often, price-controlled products are simply not stocked, but there are also many cases of prices above the agreed limit, she said.

“What I feel is a lot of impotence, a lot of anger. I feel that, as always, those of us in the lower classes continue to be screwed,” Schenone told AFP.

The price checker and her peers submit their findings to La Dignidad, which publishes periodic reports.

There is also a government-sponsored app for consumers to report violations. But opponents of the government’s plan question the efficacy of price freezes, calling instead for macroeconomic measures such as slashing money printing and public spending.

Argentina has been grappling with an economic crisis for years, registering double-digit inflation in each of the last 12 years.

The causes are multiple, including persistent deficit spending, constant currency devaluation, successive droughts and external factors like the war in Ukraine that affected energy and grain prices.

Economy Minister Sergio Massa has said inflation is the “biggest poverty factor” in Argentina and “one of the main issues to fight.” For the month of January, inflation came in at 6.0 per cent from December, and at 98.8 per cent compared to the same month a year ago, according to data released Tuesday by the INDEC statistics institute.

For food and non-alcoholic drinks, prices rose 6.8 per cent from December to January, and by 98.4 per cent from a year earlier.

AFP