Inflation in Argentina

By Rena - April. 2, 2023

Economist Nobel laureate Simon Kuznets once said,

노벨상 경제학자 Simon Kuznets에 의해이 단어를 알고 있습니까?

“There are four kinds of countries in the world: developed countries , undeveloped countries , Japan and Argentina ”

“세계에는 4개의 나라밖에 없다: ①선진국, ②개발도상국, ③ 일본 그리고 ④ 아르헨티나 이다”

This is a reference to how unique Japan and Argentina's economic histories are . Since the end of World War II, no other country's economy has declined as much as Argentina’s . And Japan is the opposite .

예외적인 경제성장을 이룬 두 나라;

③도상국→선진국(일본)

④선진국→도상국(아르헨티나)

Argentina used to be one of the top 10 wealthiest countries in the world at the end of the 19th century . But for many reasons; mostly caused by excessive money supply increases , its economy started to decline and has had an economic history of hyperinfla War II . Since independence from Spain in 1816, the country has defaulted on its debt nine times ; inflation has often risen to the double digits, even as high as 5000%, resulting in several large currency devaluations.

아르헨티나는 일본과는 대조적으로 20세기 초에 가속적인 경제발전을 이뤘지만, 그 후 급격한 경제적 몰락의 일도를 추적한다

By 1913, Argentina was among the world's 10th wealthiest states. But beginning in the 1930s, the Argentine economy deteriorated notably because of the Great Depression in 1929 and a military junta taking power since 1930.

Successive governments from the 1930s to the 1970s pursued a strategy of import substitution to achieve industrial self-sufficiency, but the government's encouragement of industrial growth diverted investment from agricultural production, which fell dramatically.

The era of import substitution ended in 1976, but at the same time growing government spending, large wage increases, and inefficient production created a chronic inflation that rose through the 1980s.

1930년부터, 세계 공황, 군사 정권의 상승, 경제 정책에 의하여 농업 생산 하락, 정부 지출 증가, 임금 상승, 생산성 악화etc.이 만성적인 인플레이션에.

And now sustained recession at the turn of the 21st century culminated in a default... It defaulted again on May 22, 2020 by failing to pay $500 million on its due date to its creditors.

이후에도 채무불이행을 반복하고 있다. (총 9회)

Argentina is dealing with one of the highest rates of inflation in the world

Here is a list of countries with the highest inflation rates (Trading Economics Jan 2022)

1st. Venezuela — 1198.0% (!!!)

2nd. Sudan — 340.0%

3rd. Lebanon — 201.0%

4th. Syria — 139.0%

5th. Suriname — 63.3%

6th. Zimbabwe — 60.7%

7th. Argentina — 51.2%

Argentina has the 3rd highest inflation rate among countries in Latin America .

남미 3위 인플레 국가! (2022년 1월 시점)

Argentina has been through several periods of hyperinflation since 1980s.

Argentina's inflation reached an extreme annual rate of 3,080% in 1989! omg

What is hyperinflation?

Hyperinflation refers to rapid and unrestrained price increases in an economy , typically at rates exceeding 50% each month over time.

하이퍼 인플레이션이란 1개월에 물건의 가격이 50% 이상 UP

인플레이션율 50% = 100엔의 물이 150엔/월 UP

This is equivalent to a yearly rate of 12974.63%.

이것이 계속되면 일년 후에는 129.75배(=1.5의 12승)로 상승. 조금 전의 물은 1만 2975엔에.

This is often as a result of war, a regime change, or socioeconomic circumstances that decrease funding from tax revenue etc.

How high is the inflation rate nowadays?

From BBC news,

Argentina's inflation rate has soared past 100% for the first time since the end of hyperinflation in the early 90s.

Inflation hit 102.5% in February , the country's statistics agency said, meaning the price of many consumer goods has more than doubled since 2022.

Argentina has been in economic difficulty for years, and many people now live in poverty.

2월 인플레이션율이 102.5%. 1991년 이후의 3자리대에. 1년간 가격이 2배가 되는 세계…!

And finally the Central Bank announced a brand new Argentina 2000 Pesos banknote last month.

만성적인 물가 상승의 결과, 최고액 지폐 2,000페소 지폐 유통 개시 예정

A new 2,000-peso banknote will be issued in Argentina in response to soaring inflation, otherwise we have to carry increasingly bigger piles of cash to pay for everyday purchases.

Here is the design of the banknote:

Its design will honor the development of science and medicine in Argentina with the ANLIS-Instituto Malbrán and Doctors Cecilia Grierson and Ramón Carrillo , both pioneers in the development of medicine, as the protagonists.

The front of the banknote will portray Grierson and Carrillo with the building of the Instituto Nacional de Microbiología Dr. Carlos G. Malbrán on the back, the Central Bank confirmed.

의학에 공헌한 2명의 과학자와 연구 시설이 그려져 있는 것.

How about Japan?

I was surprised to find out that Japan is one of the top 5 Countries with the Lowest Inflation Rates (Trading Economics Jan 2022)

1st. Rwanda — -2.0%

2nd. Chad — -0.5%

3rd. Maldives — -0.2%

4th. Gabon — 0.6% (tie)

5th. Japan — 0.6% (tie)

*United states 1.5% (March 30th 2023)

This data is a little bid old, but Japan is a lower inflation rates country .

By the way, what is the ideal rate of inflation?

If both too much and too little inflation can both lead to negative conditions, what is the ideal level of inflation? It depends. Individual countries will each have their own unique targets based upon their specific economic circumstances. That said, the United States Federal has a long-standing target of two percent (2%) inflation per year, which it has determined is the rate that best attains the policy's main goals of maintaining consumer price stability and maximizing employment.

연간 2 %의 인플레이션이 이상적입니다 ...

Actually, because I am poor at economics, I was surprised to know these facts…! We will have to keep an eye on you the economy while visiting, something I have never worried about in Japan.

More basic facts of Argentina is here,

13 Argentine Facts