Here is the English translation:
Ethereum co-founder Vitalik Buterin tweeted: "The ARS/USD is at exactly the same level as a year ago. This is a rather impressive turnaround for a currency that seemed to be on an unstoppable path of hyperinflation. The inflation rate has also been declining rapidly in recent months."
The Argentine currency ARS has long suffered from hyperinflation in recent years, not only attracting international attention, but also drawing loud criticism from the crypto community against the central bank's monetary policies, and hoping that cryptocurrencies can change the local way of storing value. However, under the policy adjustments of the Argentine government, the phenomenon of hyperinflation is undergoing a transformation.
Argentina's inflation drops to a four-year low, with early signs of economic recovery
According to data released by Argentina's National Institute of Statistics and Censuses (INDEC) on Wednesday, Argentina's monthly inflation rate in November fell to 2.4%, the lowest level in four years. This result has ignited hope among the local residents who have been plagued by the economic crisis, as they expect the most difficult period may have passed.
This data not only came in lower than the market expectation of 2.8%, but also better than the 2.7% in October. Meanwhile, the annual inflation rate has dropped from 193% to 166%. These changes have led many observers to believe that Argentina's economy may be gradually recovering from the depths.
How can Argentina overcome the economic crisis?
Against the backdrop of the austerity fiscal policy implemented by Argentine President Javier Milei, Argentina is struggling to cope with the severe economic challenges.
The Milei government has cut public spending to improve the fiscal deficit and lowered the monthly peso depreciation rate from the current 2% to 1%. Economy Minister Luis Caputo said this inflation data is the lowest since July 2020, representing a critical step in the economic recovery. Although inflation remains high, it has dropped from the peak of nearly 300% in April this year to the current 166%, and experts predict it could further decline to around 100% by the end of 2024.
Argentine people have complex views on the easing of inflation
For ordinary people, the easing of inflation has brought complex feelings. Aida Segot, a teacher in Buenos Aires, said her salary still cannot cover basic expenses. She said, "I don't know much about inflation, but I know my salary is gone in no time. It used to last until the 20th of the month, but now it's gone by the 12th." However, Milei's support rate remains strong. Many people are still dissatisfied with the traditional political forces due to the price surges and economic distortions in the past few years, which has given him a solid popular base.
According to official data, the prices of educational goods and services saw the largest increase in November, followed by rents, public utilities, and tobacco and alcohol prices. However, the price increase of food and non-alcoholic beverages was the slowest, which is good news for local consumers.
Can Argentina's economy be revived?
Argentina is still experiencing a severe economic crisis, including the near-depletion of foreign exchange reserves, capital controls, and a poverty rate of around 50%. However, the decline in inflation suggests that Milei's austerity policies may be starting to take effect. Whether the economy can further recover in the future will depend on how the government balances austerity measures and people's livelihood needs.
In any case, many Argentines are choosing to be patient with Milei. An interviewee said, "As long as we stick to this path, everything will be fine."
(Argentina's libertarian Javier Milei elected as new president, will implement economic shock therapy)
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