Argentinians struggle as inflation exceeds 100%

Buenos Aires — As Argentina’s more than 100% inflation rate saps earning power and outstrips wages, Jorge Pedro Armoa, 67, has found a painful solution: juggling three jobs as a metal worker, soccer coach and part-time salesman of medical creams, flip flops and honey.

Armoa, who lives in a small home on the outskirts of capital city Buenos Aires, gets up early every day for his seven-day working week to stave off poverty that affects almost four in 10 people in the South American country.

“The situation is complex. Salaries are very low, things are very expensive. So sometimes it’s not enough,” said Armoa, a metal mould factory worker who is the technical director of a local soccer team and funds his own small business.

Argentinians are battling through a painful economic crisis with annual inflation at 102.5% and expected to climb further, strict capital controls warping the peso’s value, and tumbling foreign currency reserves raising fears about future defaults.

Poverty, which had edged down due to state support during the pandemic, is estimated to have shot back up to nearly 40% at the end of 2022 from 36.5% in the first half of the year, as inflation has eroded the purchasing power of wages.

“Our projection for the poverty rate ... is around 40%,” said Martín González Rozada, an economist and professor of econometrics at the Universidad Di Tella, adding it was likely even higher in the early part of 2023.

“In terms of the increases in working people’s incomes, that income has increased less than the inflation of the total basic food basket,” he added, pointing out that around half of the country’s children lived in poor households.

Government handouts and subsidies have kept down levels of extreme poverty, but that may come under pressure as the state tries to overturn a deep fiscal deficit and reduce spending as dollars are scarce and a drought has hit the key farming sector.

Many of Argentina’s nearly 46-million people are unable to pay for the total basic basket of goods and services, which costs 177,000 pesos a month (about $849).

Armoa, even with his three salaries and income from his wife, a teaching assistant, often struggles to get by.

“With the issue of the price of things, it’s difficult to live. But hey, sometimes we get there and sometimes we have to scrape by to get there,” said Armoa while chopping onions at his home to improvise a dinner.

“You have to put a positive face on things, good energy and think that tomorrow things will be better.”

Reuters