Feb 4, 2023
Argentina’s Latest Unorthodox Tool to Combat Inflation: AI
(Bloomberg) -- Argentina, which for decades had unsuccessfully tried to beat runaway inflation with unorthodox policies, has come up with a new tool to keep track of price increases: artificial intelligence.
The government is deploying software that uses machine learning and artificial intelligence developed by state-run software and satellite agency Arsat to monitor price increases in real time.
Among its many unconventional approaches to attempt to curb inflation, the country has mandated price freezes for certain goods and, most recently, negotiated deals with companies to control the speed of price increases, in a bid to avoid raising the key rate and cooling economic activity.
Its unorthodox methods to guarantee compliance with the price agreement with companies often included having ministers or mayors go to the supermarket and check if the prices matched the deal.
Now, with its renewal of the program, it’s going one step further. The government is launching two new software tools: one to access live pricing for goods included in the program at the country’s supermarkets in real time. Another will allow it to check whether prices posted online comply with a deal struck with authorities to control how much they rise.
Read from Bloomberg Economics: Argentina Relies on Low Rates, Strong Peso, Unorthodox Measures
Inflation has continued to remain elevated even with these policies, with monthly price increases coming at between 5% and 7.4% in the last six months. Annual inflation is headed toward 100%, one of the fastest in the world.
“Inflation is Argentines’ biggest problem, it’s the economy’s worst poison,” Economy Minister Sergio Massa said at the program’s renewal event Friday. On the program, “We expect companies, workers, supermarkets and producers also to comply because it’s for the benefit of all Argentines.”
He added that he expects to launch price measures on fruits and vegetables next week.
Read More: Tourists Pay With Wads of Cash as Argentina Inflation Nears 100%
--With assistance from Patrick Gillespie.
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