Argentina Inflation Dips but Economic Woes Persist

Argentines, feeling the pinch of the world's highest annual inflation rates, are feeling both hopeful and weary as monthly price increases dip to their lowest in over two years amid tough austerity measures under President Javier Milei.

Inflation in July came in at 4%, Argentina's INDEC statistics agency reported, the lowest since the start of 2022. In the 12 months through July, however, inflation topped 263% - making it still the highest recorded in the world.

The South American country is trying to emerge from a severe economic crisis which ushered libertarian outsider Milei into power late last year as voters opted for a radical new approach to restore stability.

Milei's sharp cost-cutting drive has helped bolster the state's embattled finances, allowed the central bank to rebuild reserves, and tamped down inflation - though has taken a heavy toll on economic activity. Poverty levels have also risen.

Milei's policies have helped bring down monthly inflation from over 25% in December to now 4% in July, though the country has slid into recession and subsidy cuts have pushed up prices of certain services and goods.

Many Argentines still feel their purchasing power is dwindling despite inflation slowing, with poverty affecting half the population and over seven million children living in poverty, according to a study released this week by UNICEF.

Maria Ruiz, a 43-year-old teacher, said she was still having to tighten her belt due to the economic crisis.

"It's incredible that every time you try to maintain a standard of living, you fall, you fall, you fall," Ruiz said near the iconic Obelisco monument in central Buenos Aires where shop windows were full of promotions to attract customers.

Milei's government argues that fiscal responsibility is essential to stabilize the economy and cautions that things will get tougher for Argentines before improving.