World Cup Champions but... Argentina Struggles Economically with Triple-Digit Inflation

Annual Inflation Expected to Exceed 100%
Poverty Rate at 43%... Black Market Also Rampant

[Image source=AP Yonhap News]

[Asia Economy Reporter Hyunwoo Lee] Argentina, the 2022 Qatar World Cup champion, is surrounded by a festive atmosphere, while its deadly inflation rate is becoming an international topic. With the annual average inflation expected to exceed 100% this year, the economic crisis is expected to intensify further.

According to Bloomberg on the 18th (local time), Argentina's inflation rate, which started in the 50% range this year, is expected to surpass 100%. The Latin American Economic Research Foundation (FIEL) predicted Argentina's annual inflation rate to be 112.5% by the end of the year. In response to rising prices, the Central Bank of Argentina raised the benchmark interest rate to 75%.

Earlier, Argentina's National Institute of Statistics and Census (INDEC) announced on the 15th that the consumer price index for November surged 92.4% compared to the same month last year. Thanks to the government's price control policies, the monthly inflation rate rose by only 4.9% compared to the previous month, lower than the previously expected 6%. However, with the cumulative inflation rate reaching 85.3%, the cost of living is becoming severe.

As soaring inflation reduces citizens' purchasing power, the poverty rate has exceeded 43%. In major cities, the number of homeless people and those making a living by collecting trash has sharply increased over the past few years. Instead of going to the market, citizens often bring used goods to the streets for barter, and black markets are forming in various places.

The value of Argentina's currency, the peso, continues to plummet. As of the 16th, it was traded at 172.2 pesos per dollar, nearly a 70% drop compared to the previous year, but the actual market exchange rate is known to fluctuate above 300 pesos per dollar.

The U.S. political media outlet Politico pointed out, "While the World Cup victory may not have a visible impact on Argentina's economy, where about 40% of the population is impoverished, it has helped the people rediscover hope and pride."

This content was produced with the assistance of AI translation services.