According to the International Monetary Fund’s latest report, Argentina will have the fifth highest inflation rate in the world. In fourth place is Iran (47.8), third is Sudan (64.3), second is South Sudan (99.4) and with the highest inflation of them all is Venezuela (2,500,000). However, Venezuela is somewhat of an outlier in this ranking as their inflation rate is so much larger than the others. More information can be found on the World Economic Outlook for October.
This data shows a severe increase since April, when the IMF predicted that Argentina would have an inflation rate of only 19.2 percent. So what caused this doubling in only six months?
The prime culprit is the devaluation of the Argentine peso. In this time, it’s value to the US dollar dropped by 50 percent. This shot up exchange rates which, in turn, doubled from 20 pesos to the dollar to over 40 pesos to the dollar at its peak. This pattern of doubling therefore vicariously extended to the inflation rate as well — from 19.2 to 41.5.
Moreover, this number generated by the IMF differs from that of both the Argentine government and third party economists. The governmental statistics organization, INDEC, clocked in the annual inflation rate at 42 percent, and private analysts clocked it in at at an average 44.8 percent based on a survey done by Argentina’s Central Bank in October.