A street in Buenos Ires
A man walking on a street in Buenos Aires Unsplash.com/ Kyle Hinkson

Argentina was the most miserable country in the world last year, according to the latest edition of Hanke's Annual Misery Index (HAMI). The South American country climbed (or dropped) from the sixth spot in 2022, overtaking Zimbabwe to sit at the top (or bottom) of the ranking by the economist and professor.

In a publication in the National Review, Hanke explained the different factors that make up the index, saying it's the sum of "the year-end unemployment (multiplied by two), inflation, and bank-lending rates, minus the annual percentage change in real GDP per capita."

Argentina's main contributor to its misery index was its soaring inflation rate, currently the highest in the world. It ended 2023 at 211% and has continued climbing, reaching to 276.2% in February, although the monthly rate -13.2%- was slightly lower than the figure predicted by economists. Skyrocketing prices comprise over 95% of the country's score in the index.

Inflation, Hanke argued, was a major factor in deciding last year's presidential elections, in which economist Javier Milei beat then-Economy Minister Sergio Massa in the November runoff campaigning on a "platform of mothballing the central bank (BCRA), putting it in a museum, and replacing the pathetic peso with the U.S. dollar."

Argentine President Javier Milei
Argentine President Javier Milei AFP

Hanke, a vocal advocate of dollarization for Argentina, added that other countries in the region which adopted the U.S. currency as legal tender -Panama, El Salvador and Ecuador- have much lower inflation rates and dollarization, "a proven inflation-killer," makes them "much more happy than the most miserable country in the world, Argentina."

But as Milei refrains from quickly moving toward dollarization, Hanke has become more critical, saying that he and his Economy minister, Luis Caputo, have "embraced what appears to be a standard IMF austerity program."

"Instead of crushing inflation with dollarization, Milei has delivered a classic devaluation-inflation tax," said Hanke, who claims Milei has been "poorly advised." The economist referenced a prior experience in the country to back his argument: a peso-dollar peg in the 1990s called Convertibility.

"Inflation was crushed, a confidence shock was realized, reforms started to move forward, the stables started to be cleaned, and the economy boomed," added Hanke, who concluded that without dollarization, "Argentina is destined to remain miserable."

The article didn't delve into the reasons for other countries scores asides from their "major contributing factor," but another South American nation, Venezuela, followed Argentina in the ranking. With a 276.3 misery index, inflation was also the main reason why it topped the list.

Other Latin American countries in the index were:

  • Brazil: 22nd
  • Colombia: 35th
  • Uruguay: 56th
  • Chile: 56th
  • Peru: 62nd
  • Paraguay: 64th
  • Cuba: 65th

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