Enlarge image
When the 1,000-peso note goes over the counter at the bakery: the central bank's printing press is running
Photo: Claudio Santisteban / dpa
Argentina is still a long way from an inflation rate of more than 200 percent like in Venezuela.
However, due to the severe economic and financial crisis, inflation in the South American country further south has recently increased significantly.
In Argentina, the annual inflation rate in the South American country recently rose to 98.8 percent.
From December to January alone, prices in the South American country rose by six percent, according to the statistics authority (INDEC).
In particular, rents, tariffs for electricity, water and gas as well as internet and telephone charges have increased significantly.
Argentina hopes for Mercosur agreement
The inflation rate in Argentina is one of the highest in the world.
To fund the budget deficit, the central bank is constantly printing fresh money.
The second largest economy in South America suffers from a bloated state apparatus, low industrial productivity and a large shadow economy that deprives the state of a lot of tax revenue.
The national currency, the peso, continues to depreciate against the dollar, and the mountain of debt is constantly growing.
Inflation in Argentina was now additionally fueled by the global situation such as the war in Ukraine and the disruptions in the supply chains.
At the same time, the EU and Argentina are striving for much closer economic ties.
Argentinian President Alberto Ángel Fernández, together with Germany, recently campaigned for a speedy conclusion to the negotiations on one of the largest free trade agreements in the world.
Fernández said he agreed with Brazil's new President Luiz Inácio Lula da Silva: "We want to push this agreement and make it work.
That would benefit Latin America and Mercosur in particular, it would benefit Europe, and it would also strengthen multilateralism.”
The EU has been negotiating an agreement with Mercosur - which includes Brazil, Argentina, Paraguay and Uruguay - since 1999.
A breakthrough was achieved in 2019.
But there are still problems, especially when it comes to protecting the rainforest in the Amazon region, most of which has already been cut down for cattle breeding and agricultural use.
The agreement would create a market of more than 700 million people, covering almost 20 percent of the global economy and 31 percent of global goods exports.
apr/dpa