Inflation confronts Argentina with big challenge

Prices in Argentina are estimated to have risen by seven percent last month alone, making inflation one of the new government’s biggest challenges.

The runaway inflation means many Argentines are struggling to put food on the table.

According to the Buenos Aires statistics agency, inflation in the capital’s metropolitan area reached 6.5 percent last month, the biggest monthly price jump since the country’s worst economic crisis 14 years ago.

The principal cause of the jump in consumer prices was the lifting of energy and transportation subsidies in the greater Buenos Aires region by the country’s new president, Mauricio Macri.

“The reality today is that you can’t make ends meet,” Mariano Skliar, a Buenos Aires resident, told Al Jazeera.

“This is a very bad year for Argentina. Prices never stop going up, especially for food. We need to find alternatives and cheaper products.”

The government says the surge in consumer prices was temporary but it forecasts inflation for 2016 at 25 percent, a projection that many analysts call optimistic.

“May inflation will be half of what it was in April, when we saw the impact of lifting the subsidies,” Rogelio Frigerio, interior minister, told a local radio station.

“In June and July, we will be at two percent.”

In June, the government will unveil a new official consumer price index.

Macri, elected in November on promises of improving investor confidence in Latin America’s third-biggest economy, has ordered a revamp of the Indec statistics agency after years of issuing economic indicators widely rejected as inaccurate by market watchers.