As inflation soars, Argentines say they've seen this film before

[August 30, 2023]  By Lucila Sigal

BUENOS AIRES (Reuters) - Argentina is battling against triple digit inflation, its highest in over three decades, and that could climb to near 200% by the end of the year, stirring memories of hyperinflation in the late 1980s and other economic crises.

Rapidly rising prices, which have sped up this month after the government allowed a near 20% devaluation of the peso currency, are hammering consumers, pushing up poverty and stoking voter anger ahead of October general elections.

With costs often varying day-to-day, the specter of runaway inflation of years past has returned, despite hopes it can still be avoided and regular government measures including sharp interest rate hikes and price freezes to tamp inflation down.

"This is like a movie one has already seen several times," said Roberto Gonzalez Blanco, a retired 80-year-old public accountant, who has four daughters and 11 grandchildren, one of whom went to Australia in search of better opportunities.

The high inflation rate, which J.P. Morgan has forecast could hit 190% this year, has left four-in-10 people in poverty as prices have risen faster than wages, leading to a cost-of-living crisis and stoking anger on the streets. August monthly inflation is likely to top 10%, analysts say.

That has also boosted an outsider radical presidential candidate, Javier Milei, who came first in an August open primary election, beating the two main traditional parties and making himself the favorite in what remains an uncertain race.

He has pledged to dollarize the economy over time and shutter the central bank, blaming a "caste" of political elite for the economic crisis in boisterous tirades to cheering supporters who love his abrasive, no holds barred style.

A man pleads with riot police during protests against the Supreme Court and its backing of banking curbs, in Buenos Aires, Argentina January 10, 2002. REUTERS/Rickey Rogers/File Photo

'VERY AFRAID OF WHAT IS COMING'

Nora Marful, 63, a former bank employee, said she felt none of the presidential candidates represented her as a working Argentine. Milei will compete against Economy Minister Sergio Massa and conservative ex-Security Minister Patricia Bullrich.

"I am very afraid of what is coming. It seems to me that it is the same as what I experienced years ago, in 2015, in 2001," she said, referring to past economic crises in the country.

"The way I see it, these characters are focused on a certain sector, a sector of wealth, well-being, upper class. They forget about the middle class and the poor."

While the late 1980s were dominated by inflation, the period around 2001 was a more full-blow economic and political crisis, which saw a revolving door of presidents and one, Fernando De la Rua, fleeing the presidential palace by helicopter amid riots.

Argentina recently saw some scattered looting of shops and supermarkets, with over 100 arrests, though that has calmed down in recent days.

"The issue of looting and everything that has been happening these days hits me badly because I lived through 2001, which was very ugly," said retiree Jorge Del Teso, 68, who has three daughters and previous worked in finance.

"People are just fed up with politics."

(Reporting by Lucila Sigal; Editing by Nicolas Misculin, Adam Jourdan and Alistair Bell)

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