Buenos Aires Hosts 2022 Latin American Cities Conference
The 2022 Latin American Cities Conference convenes today in Buenos Aires to explore Argentina’s political and economic outlook.
The conference comes as the Central Bank of Argentina last week increased interest rate to 69.5% – the largest rise in three years – signaling a more aggressive stance against surging inflation. Accordingly, consumer prices rose 7.4% in July and resulted in increasing annual inflation to a 20 year high of 71%.
Argentina’s inflation woes were exacerbated in July when the Economic Minister Martin Guzman abruptly resigned, creating a political crisis long brewing inside the ruling Frente de Todos alliance. President Alberto Fernandez replaced Guzman with economist Silvina Batakis, who lasted only three weeks, before hiring Sergio Massa for the role. Political turmoil has created further volatility and uncertainty, leading businesses to increase prices.
Expect the conference delegates to provide recommendations to the government to combat inflation. Economists, who have warned that inflation could hit 90% by the end of the year, will likely advocate for the government to immediately stop printing money to finance government spending and promote policies to lower the fiscal deficit and build up its foreign currency reserves. In the short-term, inflation is likely to continue to increase.
