Consumer prices in the South American country have been soaring after the devaluation of the peso by the new government

Annual inflation in Argentina hit a three-decade high of 254% in January even as the rate slowed slightly in monthly terms, according to official data released on Wednesday. 

Newly installed President Javier Milei has subjected the country to a number of ‘shock therapy’ reforms aimed at stabilizing the ailing economy, including devaluing the nation’s currency by 50% against the dollar and hiking the key interest rate to 133%.

“If one takes the number alone, isolated, it is horrifying. And indeed, it is, but you have to look at where we were and what the trend was,” Milei said in comments about the inflation data during a public appearance on the television station La Nacion Mas. The president estimated that inflation would come under control within two years.

Meanwhile, monthly inflation in the country stood at 20.6% in January, down from the 25.5% registered for December. Annual inflation in December was 211%. According to the report, transport in Argentina soared 26.3% in price, while the cost of goods and services skyrocketed 44.4% in January.

READ MORE: IMF slashes Argentina’s growth forecast over Milei’s ‘shock therapy’

According to Milei, Argentina’s “economic activity would have fallen much more” had he not implemented the new policies. “We are focusing on taking care of the most vulnerable class,” the president argued. A self-described anarcho-capitalist, Milei, who took office in December 2023, has warned it will take time for the results of his program to be seen and that things could get worse before they get better. Latin America’s third-biggest economy has been beset by a severe economic crisis after decades of financial mismanagement.

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