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Argentina reports its first single-digit inflation in 6 months as markets swoon and costs hit home

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Argentina reports its first single-digit inflation in 6 months as markets swoon and costs hit home
News

News

Argentina reports its first single-digit inflation in 6 months as markets swoon and costs hit home

2024-05-15 05:59 Last Updated At:06:00

BUENOS AIRES, Argentina (AP) — Argentina’s monthly inflation rate eased sharply to a single-digit rate in April for the first time in half a year, data released Tuesday showed, a closely watched indicator that bolsters President Javier Milei’s severe austerity program aimed at fixing the country’s troubled economy.

Prices rose at a rate of 8.8% last month, the Argentine government statistics agency reported, down from a monthly rate of 11% in March and well below a peak of 25% last December, when Milei became president with a mission to combat Argentina’s dizzying inflation, among the highest in the world.

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A child eats a free breakfast served by a soup kitchen that was set up at the Obelisk as a protest against the city government's "hygiene and cleanliness" policy in Buenos Aires, Argentina, Tuesday, May 14, 2024. The policy involves authorities removing the homeless from the streets. (AP Photo/Gustavo Garello)

BUENOS AIRES, Argentina (AP) — Argentina’s monthly inflation rate eased sharply to a single-digit rate in April for the first time in half a year, data released Tuesday showed, a closely watched indicator that bolsters President Javier Milei’s severe austerity program aimed at fixing the country’s troubled economy.

People eat a free breakfast served by a soup kitchen that was set up at the Obelisk as a protest against the city government's "hygiene and cleanliness" policy in Buenos Aires, Argentina, Tuesday, May 14, 2024. The policy involves authorities removing the homeless from the streets. (AP Photo/Gustavo Garello)

People eat a free breakfast served by a soup kitchen that was set up at the Obelisk as a protest against the city government's "hygiene and cleanliness" policy in Buenos Aires, Argentina, Tuesday, May 14, 2024. The policy involves authorities removing the homeless from the streets. (AP Photo/Gustavo Garello)

People eat a free breakfast served by a soup kitchen that was set up at the Obelisk as a protest against the city government's "hygiene and cleanliness" policy in Buenos Aires, Argentina, Tuesday, May 14, 2024. The policy involves authorities removing the homeless from the streets. (AP Photo/Gustavo Garello)

People eat a free breakfast served by a soup kitchen that was set up at the Obelisk as a protest against the city government's "hygiene and cleanliness" policy in Buenos Aires, Argentina, Tuesday, May 14, 2024. The policy involves authorities removing the homeless from the streets. (AP Photo/Gustavo Garello)

A youth picks through discarded produce at the central market for fruit and vegetables in Buenos Aires, Argentina, Friday, May 10, 2024. (AP Photo/Natacha Pisarenko)

A youth picks through discarded produce at the central market for fruit and vegetables in Buenos Aires, Argentina, Friday, May 10, 2024. (AP Photo/Natacha Pisarenko)

File - A worker counts money at a grocery store in Buenos Aires, Argentina, Nov. 21, 2023. Prices have surged so dramatically that the government has multiplied the size of its biggest banknote in circulation to 10,000 peso note, five times the value of the previous biggest bill, according to the central bank on May 8, 2024, and the new bill is expected circulate in June. (AP Photo/Natacha Pisarenko, File)

File - A worker counts money at a grocery store in Buenos Aires, Argentina, Nov. 21, 2023. Prices have surged so dramatically that the government has multiplied the size of its biggest banknote in circulation to 10,000 peso note, five times the value of the previous biggest bill, according to the central bank on May 8, 2024, and the new bill is expected circulate in June. (AP Photo/Natacha Pisarenko, File)

Argentina President Javier Milei speaks during a ceremony to commemorate Holocaust and Heroism Day, in Buenos Aires, Argentina, Wednesday, May 8, 2024. (AP Photo/Natacha Pisarenko)

Argentina President Javier Milei speaks during a ceremony to commemorate Holocaust and Heroism Day, in Buenos Aires, Argentina, Wednesday, May 8, 2024. (AP Photo/Natacha Pisarenko)

A vendor waits for customers at the central market for fruit and vegetables in Buenos Aires, Argentina, Friday, May 10, 2024. (AP Photo/Natacha Pisarenko)

A vendor waits for customers at the central market for fruit and vegetables in Buenos Aires, Argentina, Friday, May 10, 2024. (AP Photo/Natacha Pisarenko)

“Inflation is being pulverized,” Manuel Adorni, the presidential spokesperson, posted on social media platform X after the announcement. “Its death certificate is being signed.”

Although praised by the International Monetary Fund and cheered by market watchers, Milei’s cost-cutting and deregulation campaign has, at least in the short term, squeezed families whose money has plummeted in value while the cost of nearly everything has skyrocketed. Annual inflation, the statistics agency reported Tuesday, climbed slightly to 289.4%.

“People are in pain,” said 23-year-old Augustin Perez, a supermarket worker in the suburbs of Buenos Aires who said his rent had soared by 90% since Milei deregulated the real estate market and his electricity bill had nearly tripled since the government slashed subsidies. “They say things are getting better, but how? I don’t understand.”

Milei’s social media feed in recent weeks has become a stream of good economic news: Argentine bonds posting some of the best gains among emerging markets, officials celebrating its first quarterly surplus since 2008 and the IMF announcing Monday it would release another $800 million loan — a symbolic vote of confidence in Milei’s overhaul.

“The important thing is to score goals now,” Milei said at an event Tuesday honoring former President Carlos Menem, a divisive figure whose success driving hyperinflation down to single digits through free-market policies Milei repeatedly references. "We are beating inflation.”

Even so, some experts warn that falling inflation isn’t necessarily an economic victory — rather the symptom of a painful recession. The IMF expects Argentina’s gross domestic product to shrink by 2.8% this year.

“You’ve had a massive collapse in private spending, which explains why consumption has dropped dramatically and why inflation is also falling,” said Monica de Bolle, a senior fellow at the Peterson Institute for International Economics who studies emerging markets. “People are worse off than they were before. That leads them to spend less.”

Signs of an economic slowdown are everywhere in Buenos Aires — the lines snaking outside discounted groceries, the empty seats in the city’s typically booming restaurants, the growing strikes and protests.

At an open-air market in the capital's Liniers neighborhood, Lidia Pacheco makes a beeline for the garbage dump. Several times a week, the 45-year-old mother of four rummages through the pungent pile to salvage the tomatoes with the least mold.

“This place saves me,” Pacheco said. Sky-high prices have forced her to stick to worn-out clothes and shoes and change her diet to the point of giving up yerba mate, Argentina’s ubiquitous national drink brewed from bitter leaves. “Whatever I earn from selling clothes goes to eating,” she said.

Argentina's retail sales in the first quarter of 2024 fell nearly 20% compared to the year before, a clip comparable to that of the 2020 pandemic lockdowns. The consumption of beef — an Argentine classic — dropped to its lowest level in three decades this quarter, the government reported, prompting panicked editorials about a crisis in Argentina's national psyche.

“Now I buy pork and chicken instead,” said Leonardo Buono, 51-year-old hospital worker. “It’s an intense shock, this economic adjustment.”

Milei, a self-proclaimed “anarcho-capitalist” and former TV personality, warned his policies would hurt at first.

He campaigned brandishing a chainsaw to symbolize all the cutting he would do to Argentina’s bloated state, a dramatic change from successive left-leaning Peronist governments that ran vast budget deficits financed by printing money.

Promising the pain would pay off, he slashed spending on everything from construction and cultural centers to education and energy subsidies, from soup kitchens and social programs to pensions and public companies. He has also devalued the Argentine peso by 54%, helping close the chasm between the peso’s official and black-market exchange rates but also fueling inflation.

Inflation in the first four months of 2024 surged by 65%, the government statistics agency reported Tuesday. Prices in shops and restaurants have reached levels similar to those in the U.S. and Europe.

But Argentine wages have remained stagnant or declined, with the monthly minimum wage for regulated workers just $264 as of this month, with workers in the informal economy often paid less.

Today that sum can buy scarcely more than a few nice meals at Don Julio, a famous Buenos Aires steakhouse. Nearly 60% of the country’s 46 million people now live in poverty, a 20-year high, according to a study in January by Argentina’s Catholic University.

Even as discontent appears to rise, the president’s approval ratings have remained high, around 50%, according to a survey this month by Argentine consulting firm Circuitos — possibly a result of Milei’s success blaming his predecessors for the crisis.

“It’s not his fault, it’s the Peronists who ruined the country, and Milei is trying to do his best,” said Rainer Silva, a Venezuelan taxi driver who fled his own country’s economic collapse for Argentina five years ago. “He’s like Trump, everyone’s against him.”

Argentina’s powerful trade unions and leftist political parties have pushed back against Milei with weekly street protests, but haven’t managed to galvanize a broad swath of society.

That could change — last week, a massive protest against budget cuts to public universities visibly hit a nerve, drawing hundreds of thousands of people.

“The current situation is completely unsustainable," said de Bolle, the economy expert.

Associated Press writer Almudena Calatrava contributed to this report.

A child eats a free breakfast served by a soup kitchen that was set up at the Obelisk as a protest against the city government's "hygiene and cleanliness" policy in Buenos Aires, Argentina, Tuesday, May 14, 2024. The policy involves authorities removing the homeless from the streets. (AP Photo/Gustavo Garello)

A child eats a free breakfast served by a soup kitchen that was set up at the Obelisk as a protest against the city government's "hygiene and cleanliness" policy in Buenos Aires, Argentina, Tuesday, May 14, 2024. The policy involves authorities removing the homeless from the streets. (AP Photo/Gustavo Garello)

People eat a free breakfast served by a soup kitchen that was set up at the Obelisk as a protest against the city government's "hygiene and cleanliness" policy in Buenos Aires, Argentina, Tuesday, May 14, 2024. The policy involves authorities removing the homeless from the streets. (AP Photo/Gustavo Garello)

People eat a free breakfast served by a soup kitchen that was set up at the Obelisk as a protest against the city government's "hygiene and cleanliness" policy in Buenos Aires, Argentina, Tuesday, May 14, 2024. The policy involves authorities removing the homeless from the streets. (AP Photo/Gustavo Garello)

People eat a free breakfast served by a soup kitchen that was set up at the Obelisk as a protest against the city government's "hygiene and cleanliness" policy in Buenos Aires, Argentina, Tuesday, May 14, 2024. The policy involves authorities removing the homeless from the streets. (AP Photo/Gustavo Garello)

People eat a free breakfast served by a soup kitchen that was set up at the Obelisk as a protest against the city government's "hygiene and cleanliness" policy in Buenos Aires, Argentina, Tuesday, May 14, 2024. The policy involves authorities removing the homeless from the streets. (AP Photo/Gustavo Garello)

A youth picks through discarded produce at the central market for fruit and vegetables in Buenos Aires, Argentina, Friday, May 10, 2024. (AP Photo/Natacha Pisarenko)

A youth picks through discarded produce at the central market for fruit and vegetables in Buenos Aires, Argentina, Friday, May 10, 2024. (AP Photo/Natacha Pisarenko)

File - A worker counts money at a grocery store in Buenos Aires, Argentina, Nov. 21, 2023. Prices have surged so dramatically that the government has multiplied the size of its biggest banknote in circulation to 10,000 peso note, five times the value of the previous biggest bill, according to the central bank on May 8, 2024, and the new bill is expected circulate in June. (AP Photo/Natacha Pisarenko, File)

File - A worker counts money at a grocery store in Buenos Aires, Argentina, Nov. 21, 2023. Prices have surged so dramatically that the government has multiplied the size of its biggest banknote in circulation to 10,000 peso note, five times the value of the previous biggest bill, according to the central bank on May 8, 2024, and the new bill is expected circulate in June. (AP Photo/Natacha Pisarenko, File)

Argentina President Javier Milei speaks during a ceremony to commemorate Holocaust and Heroism Day, in Buenos Aires, Argentina, Wednesday, May 8, 2024. (AP Photo/Natacha Pisarenko)

Argentina President Javier Milei speaks during a ceremony to commemorate Holocaust and Heroism Day, in Buenos Aires, Argentina, Wednesday, May 8, 2024. (AP Photo/Natacha Pisarenko)

A vendor waits for customers at the central market for fruit and vegetables in Buenos Aires, Argentina, Friday, May 10, 2024. (AP Photo/Natacha Pisarenko)

A vendor waits for customers at the central market for fruit and vegetables in Buenos Aires, Argentina, Friday, May 10, 2024. (AP Photo/Natacha Pisarenko)

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Dali cargo ship leaves Baltimore for Virginia, nearly 3 months after bridge collapse

2024-06-25 07:26 Last Updated At:07:30

The cargo ship Dali headed out of Baltimore for Virginia on Monday, nearly three months after it lost power and crashed into one of the Francis Scott Key bridge’s supporting columns and caused the bridge to collapse.

The 984-foot Dali started moving shortly before 8:30 a.m. with four tugboats.

The Dali was sailing under its own power with a full crew of 22 and six salvage experts, the U.S. Coast Guard said in a news release.

The Coast Guard is overseeing the voyage and providing a 500-yard safety zone around the Dali during its trip.

The Dali is scheduled to go directly to Virginia International Gateway to have roughly 1,500 cargo containers off-loaded to reduce draft, the Coast Guard said. The vessel is then scheduled to travel further to Norfolk International Terminal, where it is scheduled to undergo continued salvage and repairs from damage caused during the bridge collapse.

Shortly after leaving the Port of Baltimore early on March 26, the ship lost power and propulsion and crashed into one of the bridge’s supporting columns, killing six construction workers.

On May 20, the Dali was refloated and guided back to port. The vessel had been stuck amid the wreckage for almost two months, with a massive steel truss draped across its damaged bow.

A National Transportation Safety Board investigation found the ship experienced two power outages in the hours before it left the Port of Baltimore. In the moments before the bridge collapsed, it lost power again and veered off course. The agency is still investigating what caused the electrical failures.

In an update to its May investigative report, the NTSB said Monday that investigators have completed in-person interviews with the Dali’s crew.

The update noted that investigators have removed an electrical component known as a terminal block, as well as two portions of control wiring associated with the terminal block.

“We continue to examine the removed components at the NTSB Materials Laboratory,” the board said. “We will continue to evaluate the design and operation of the vessel’s electrical power distribution system, and investigate all aspects of the accident to determine the probable cause and identify potential safety recommendations.”

Last week, under an agreement confirmed by a federal judge, some members of the Dali's crew were allowed to return home. Of the 10 allowed to leave, eight have done so, said Darrell Wilson, a spokesperson for ship manager Synergy Marine. The roughly two dozen total seafarers hail from India and Sri Lanka.

Under the agreement, the crew members who return home must be available for depositions.

Thousands of longshoremen, truckers and small business owners have seen their jobs impacted by the collapse, prompting local and state officials to prioritize reopening the port and restoring its traffic to normal capacity in hopes of easing the economic ripple effects.

Earlier this month, officials announced the reopening of the Fort McHenry federal channel, after clearing wreckage from the 700-foot-wide by 50-foot deep channel.

Monday also was the submission deadline in Maryland for proposals to rebuild the bridge. Procurement regulations prohibit the state from providing information about the proposals until the contract award is made and the state announces the design-build team. The state estimates the award and announcement sometime in mid- to late summer.

Officials have said they hope to rebuild the bridge by 2028.

The container ship Dali pulls away from the Seagirt Marine Terminal on its way to Norfolk, Monday, June 24, 2024, nearly three months after the ship hit a support pier of the Francis Scott Key Bridge causing a catastrophic collapse. (Jerry Jackson/The Baltimore Sun via AP)

The container ship Dali pulls away from the Seagirt Marine Terminal on its way to Norfolk, Monday, June 24, 2024, nearly three months after the ship hit a support pier of the Francis Scott Key Bridge causing a catastrophic collapse. (Jerry Jackson/The Baltimore Sun via AP)

The container ship Dali pulls away from the Seagirt Marine Terminal on its way to Norfolk, Monday, June 24, 2024, nearly three months after the ship hit a support pier of the Francis Scott Key Bridge causing a catastrophic collapse. (Jerry Jackson/The Baltimore Sun via AP)

The container ship Dali pulls away from the Seagirt Marine Terminal on its way to Norfolk, Monday, June 24, 2024, nearly three months after the ship hit a support pier of the Francis Scott Key Bridge causing a catastrophic collapse. (Jerry Jackson/The Baltimore Sun via AP)

The container ship Dali approaches the Chesapeake Bay Bridge, Monday, June 24, 2024, on its way to Norfolk, Va., as a man fishes at Sandy Point State Park. Ninety days ago the ship hit a support pier of the bridge causing a catastrophic collapse. (Jerry Jackson/The Baltimore Sun via AP)

The container ship Dali approaches the Chesapeake Bay Bridge, Monday, June 24, 2024, on its way to Norfolk, Va., as a man fishes at Sandy Point State Park. Ninety days ago the ship hit a support pier of the bridge causing a catastrophic collapse. (Jerry Jackson/The Baltimore Sun via AP)

This image provided by the U.S. Coast Guard shows the U.S. Coast Guard Cutter Sailfish, an 87-foot Marine Protector class vessel, as it prepares to escort the Motor Vessel Dali during its transit from the Port of Baltimore to the Port of Virginia, Monday, June 24, 2024. (Petty Officer 3rd Class Christopher Bokum/U.S. Coast Guard via AP)

This image provided by the U.S. Coast Guard shows the U.S. Coast Guard Cutter Sailfish, an 87-foot Marine Protector class vessel, as it prepares to escort the Motor Vessel Dali during its transit from the Port of Baltimore to the Port of Virginia, Monday, June 24, 2024. (Petty Officer 3rd Class Christopher Bokum/U.S. Coast Guard via AP)

FILE - The collapsed Francis Scott Key Bridge rests on the container ship Dali, May 12, 2024, in Baltimore, as seen from Riviera Beach, Md. Crew members on the cargo ship Dali can head home as soon as Thursday, June 20, 2024, under an agreement that allows lawyers to question them amid ongoing investigations into what led to the deadly collapse of Baltimore's Francis Scott Key Bridge. (AP Photo/Mark Schiefelbein, File)

FILE - The collapsed Francis Scott Key Bridge rests on the container ship Dali, May 12, 2024, in Baltimore, as seen from Riviera Beach, Md. Crew members on the cargo ship Dali can head home as soon as Thursday, June 20, 2024, under an agreement that allows lawyers to question them amid ongoing investigations into what led to the deadly collapse of Baltimore's Francis Scott Key Bridge. (AP Photo/Mark Schiefelbein, File)

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