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Monday, 6 May, 2002, 06:52 GMT 07:52 UK
Argentina inflation soars
Lavagna
Economy minister Lavagna has vowed not to intervene
Argentine prices have risen 20% so far this year following the devaluation of the country's currency the peso, officials have said.


The situation is very difficult

Alfredo Atanasof
Cabinet chief
For some goods, the price rises have been even greater.

The prices of fresh eggs and vegetable oils, as well as the prices of computers and televisions, have risen between 100% and 200%, according to a survey by the Argentine business chamber CAME.

The sharpest price increases were seen in April, raising fears that there could be worse to come.

"On Monday the official inflation rate [for April] will be announced, and it will be around 10% [for that month alone]," said cabinet chief Alfredo Atanasof in interviews on Sunday.

Suffering

A 70% fall in the value of the peso since the 11-year peg to the US dollar was ended in January has sent the prices of imported goods soaring.

Argentine child eating
Many Argentines cannot afford to buy food
This has boosted demand for home-grown products, sending these prices higher too.

Had it not been for a price freeze on public utilities, the official inflation rate would have been even higher.

After four years of recession, the country suffers from almost 20% unemployment and flat wages, so the Argentine people can ill afford a return to hyper-inflation - as seen during the 1980s when inflation reached almost 5,000%.

"The situation is very difficult," said Mr Atanasof.

Surprise

Prices have risen much more sharply than President Eduardo Duhalde had predicted.

In January, he predicted that inflation for the year as a whole would reach 15%.

Despite having been caught by surprise, the Argentine government will not intervene, Mr Atanasof said.

Last week, Argentina's new economy minister, Roberto Lavagna, vowed to keep the peso floating.

See also:

05 May 02 | Americas
Anxious Argentines send money home
03 May 02 | Business
Argentine fishing industry suffers
29 Apr 02 | Business
Chaos as Argentine banks re-open
28 Apr 02 | Business
Argentine banks set to re-open
27 Apr 02 | Business
Argentines swap pesos for 'Evitas'
26 Apr 02 | Business
Argentina cash squeeze tightens
26 Apr 02 | Business
Trade negotiator takes the helm
26 Apr 02 | Business
Argentina gets new economy chief
25 Apr 02 | Business
Argentina tightens banking freeze
25 Apr 02 | Americas
Argentina takes steps to end crisis
24 Apr 02 | Business
Economy chief loses the plot
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