(Bloomberg) -- Argentine President Alberto Fernandez called on his government to implement “all necessary measures” to combat 52% inflation that's been aggravated by the surge of global commodity prices due to Russia's invasion of Ukraine.
In a somber, 18-minute speech, Fernandez said his ministers would start rolling out new measures as of Saturday without providing specifics. Earlier in the week, he declared a “war on inflation” shortly before data posted Tuesday showed prices accelerating for a third straight month in February.
“We're in an extraordinary situation that requires extraordinary solutions,” Fernandez said Friday. His government's focus “from this moment on will be implementing all the necessary measures to confront inflation.”
On Saturday morning, the government raised export taxes on soy meal and oil to 33% from 31%, according to a decree, which cited the invasion of Ukraine. It also created a “stabilization fund” for wheat in a separate decree.
Fernandez's speech comes a day after Argentina's senate approved the government's pending $45 billion agreement with the International Monetary Fund. The upcoming measures are likely not part of the policies outlined in the IMF pact, which could be approved by the institution's board next week.
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Fernandez's broad ruling coalition emerged divided after the IMF vote, with the inflation strategy a central issue. Some senators from his coalition voted against the deal, saying that this year's target range of inflation of 38% to 48% “will never be met.”
The president said the war in Ukraine isn't the root cause of Argentina's inflation. but it's “causing bigger problems.” Private economists outline other factors driving inflation higher in South America's second-largest economy: The eventual unwinding of electric bill subsidies, a faster pace of controlled peso devaluations and wage negotiations with labor unions, among others.
Prices aren't expected to ease soon since the food costs have climbed higher still in March and the government implemented a nearly 10% hike on fuel. Analysts at JPMorgan Chase & Co. project annual inflation reaching 62% by the end of this year.
“We'll put ourselves in front of the fight against inflation,” Fernandez concluded.
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