After the new Argentine ** took office in December, prices in Argentina have risen even more fiercely in the past two weeks, with beef ** soaring by 73%, gas being 60% more expensive, and even diaper money being twice as much as last month. High prices have sparked anxiety, and Argentina already has the highest number of psychiatrists per capita in the world.
Argentina's inflation rate is 160% a year, and the new Mr. Milley took office in the middle of the month, before launching his "shock**" economic plan, first depreciating the official exchange rate of the peso by 54% to 800 pesos per dollar, leading to an even larger increase in prices in December. Economic consultancy Ecolatina expects inflation to reach around 25% in December, up from 12 in November8%, with an annual inflation rate of 2103%。
Changes in the inflation rate in Argentina over the past decade. (source：trading economics)
The depreciation of the currency makes imports such as coffee, electronic equipment and natural gas instantly** because they are priced in US dollars. For example, the day after the currency devaluation, the monthly subscription fee for Netflix Argentina is 60%**. Domestic food producers are also raising the cost of constantly reacting to the cost.
Natural gas** has also soared, with 60% of natural gas ** from December 7 to December 13 and has a trickle-down effect on the economy. In the past, in the face of prolonged high inflation, Argentine unions often tried to keep up by negotiating large wage increases, but these wage increases were quickly swallowed up by sharp prices. Informal workers, who make up nearly half of the economy, including nannies and street vendors, also do not receive such wage increases. Prices are soaring at a dizzying rate, and people's incomes can't keep up.
Inflation will fall with across-the-board tighteningThe outside world believes that the "shock" proposed by Argentina's new ** will cause the Argentine economy to collapse completely, and inflation can also fall. The market is forecasting a decline in consumer demand in Argentina next year as households will be forced to prioritize fixed costs such as energy bills, preventing retail *** Household consumption fell by 6 percent in November compared to October on a seasonally adjusted basis, according to a report from the Argentine Chamber of Commerce and Services9%。JPMorgan Chase & Co. also said that the country's economic activity will decline rapidly, with GDP contracting by 3% in 2024. And assuming that the stabilization plan is successful, monthly inflation should return to single digits in the second half of next year.
Argentines turn to psychiatrists for anxietyBut before prices stabilized, four out of 10 Argentines were already living in poverty, and high inflation was already taking a toll on Argentina's mental health. Psychologists are generally accepted in Argentine society, with a 2015 study estimating that there are 194 psychologists per 100,000 Argentines, more than three times higher than Finland and Norway, which rank second. In 2022, psychology was also one of the most sought-after careers at the University of Buenos Aires, second only to medicine.
The local psychiatrist observed that the stress that Argentines are talking about now is economic, which is understandable, and the first thing you do when you wake up in the morning is to check what the dollar exchange rate is, how much is the price of goods, and how the quality of life will be good. A survey found that Argentina's national "sentiment" ranked only higher than Poland among 39 countries. Prices have risen so much that people are exhausted, everyone is in a bad mood, and people are getting sick.
Header image**:p ixabay).