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

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.

“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)

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)

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)

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)

PHOENIX (AP) — A judge on Friday rejected an effort by GOP lawmakers to use the term “unborn human being” to refer to a fetus in the pamphlet that Arizona voters will use to weigh a ballot measure that would expand abortion access in the state.

Maricopa County Superior Court Judge Christopher Whitten said the wording the legislative council suggested is “packed with emotion and partisan meaning” and asked for what he called more “neutral” language. The measure aims to expand abortion access from 15 weeks to 24 weeks – the point at which a fetus can survive outside the womb.

It would allow exemptions to save the woman’s life or to protect her physical or mental health. It would also prevent the state from adopting or enforcing laws that would forbid access to the procedure.

Arizona House Speaker Ben Toma, who is a co-chair of the legislative council, said the group will appeal the court’s decision to the state Supreme Court.

“The ruling is just plain wrong and clearly partisan,” said Toma, a Republican.

The State Supreme Court has until Aug. 27 to rule on the appeal for the language to be changed.

Aaron Thacker, communications director for Arizona Secretary of State Adrian Fontes, noted that the final decision on the ballot itself remains in the air.

“There’s still a lot of scenarios at play," he said. "Even after the secretary certifies the signatures, the courts have to decide if counties can put it on the ballot or not."

Arizona for Abortion Access, the organization leading the ballot measure campaign, sued the council earlier this month over the suggested language and advocated for the term “fetus,” which the council rejected.

Attorney General Kris Mayes wrote in a motion to submit an amicus brief that “fetus" and “pregnancy” are both neutral terms that the council could adopt.

“It’s incredibly important to us that Arizona voters get to learn more about and weigh our measure in objective and accurate terminology,” said Dawn Penich, communications director for the abortion access group.

Democrats have centered abortion rights in their campaigns in this year’s elections. Organizers in five other states have also proposed similar measures that would codify abortion access in their state constitutions: Colorado, Florida, Maryland, Nevada and South Dakota.

Arizona organizers submitted more than double the amount of signatures needed for the measure to appear on the ballot.

FILE - Arizona abortion-rights supporters deliver over 800,000 petition signatures to the capitol to get abortion rights on the November general election ballot July 3, 2024, in Phoenix. A judge on Friday, July 26, rejected an effort by GOP lawmakers to use the term “unborn human being” to refer to a fetus in the pamphlet that Arizona voters will use to decide on a ballot measure that would expand abortion access in the state. (AP Photo/Ross D. Franklin, File)