Inflation fuels social tension in Argentina

On Thursday, up to 100,000 people participated in a march for employment and fair wages and against hunger and poverty on the Plaza de Mayo in the center of Buenos Aires organized by the workers movement Unidad Piquetera (Picketers Union), as part of widespread protests across Argentina. 

In April, Argentina's monthly inflation rate was 6.7% and the number for the year to date reached 23.1%, according to the national statistics agency, INDEC. Argentina, which has been struggling with high inflation for years, is on course to see inflation of at least 60% by the end of 2022. Poverty has risen by over 43% since the beginning of the year, according to a report by the Social Debt Observatory of the Pontifical Catholic University of Argentina.  

"The social organizations that called for this demonstration are demanding that the state — if it does not provide answers to the structural crisis — at least provide answers to the social distress," Silvia Saravia, the national coordinator of the labor, health and justice movement Barrios de Pie (Neighborhoods on Their Feet), told DW ahead of the march. "The answers proposed so far do not suffice. We need food and help to start a business and earn an income." She said the ration card and voucher measures, announced by the government after recent protests, were insufficient: "Since these vouchers will be eaten up by inflation, we think that all people in working-class neighborhoods will take to the streets in a peaceful and organized way."

Rampant 'economic discontent'

The economist Jorge Neyro told DW that inflation is the underlying problem. "There is a lot of social and economic discontent in many sectors of society — not only low-income sectors," Neyro said. "Things weren't going very well during the pandemic in 2020 and 2021 either," he added. "But there were fewer protests because of the pandemic. Now there are always marches and demonstrations from different sectors of society demanding similar things."

"All in all, the labor market in Argentina has recovered to some extent since the pandemic," Neyro said. "But now there is the phenomenon of impoverished workers. Many receive an income that cannot cover the costs of a basic food basket. And that's mainly because of high inflation." He said "inflationary gymnastics" had been going on for many years and the negative trend was accelerating. "It's clear that the international situation has significantly exacerbated Argentina's problems," he said.

The global increase in fuel prices will also have a hard impact on Argentina, especially as the International Monetary Fund is pressuring the country to reduce energy subsidies as part of its debt program. The Economy Ministry has also announced a 16.5% hike in energy rates effective in June.

Food prices up

Food prices have already risen significantly. INDEC recorded a 6% increase in March. Saravia said there was no obligation to accept this considering that Argentina is "a country that mainly produces food."

"Yet it is sold as if we don't produce it here and have to import it," Saravia said. "It is estimated that our country produces food for about 400 million people. There are 45 million of us here. We propose establishing a quota and setting enough aside to feed the population. Only the rest should be sold on the world market," she said. "Given the critical global situation regarding food prices, we think businesspeople will make good profits but we have to prioritize the people here."

Neyro said the government of President Alberto Fernandez was trying to establish a "balance" between the different demands but that this was "not easy and is not working." He said the economy had pushed the government "into a corner."

The 2023 presidential election has raised urgency for a course correction, Neyro said, but divisions within the government are hindering the process. "There is weekly, I would even say daily, criticism of economic policy, the direction foreign policy is taking, and other things, from the ranks of the government, especially from Vice President Cristina Fernandez de Kirchner and her supporters," he said. "This is public criticism of the president's decisions." Neyro said this was a serious problem because it affected the legitimacy of the government and made politics less predictable.

This article was originally written in Spanish.