(Bloomberg) -- Argentina posted its highest annual inflation rate in three decades in 2022 as a political crisis exacerbated price hikes driven by the government’s lack of a credible economic plan. 

Consumer prices rose 94.8% in December from the same month a year earlier, according to government data published Thursday. Prices also rose 5.1% last month from November, accelerating after cooling in three of the past four months. Tourism, alcoholic drinks and housing costs led monthly price hikes.  

Later on Thursday, Argentina’s central bank said in a statement that the board decided to keep the benchmark interest rate unchanged at 75%.

“Keeping the reference rate unchanged will contribute to the gradual deceleration of inflation in the medium term,” according to its statement.

Surging annual inflation, expected to surpass 100% in the coming months, has once again become the dominant issue in Latin America’s second-biggest economy. How high or low inflation goes this year will have a major impact on Argentina’s presidential election in October.

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Economy Minister Sergio Massa, who took over in August after his two predecessors resigned in a span of four weeks, has deployed a mix of traditional and unconventional policy steps to cool consumer prices. 

Adjusted for inflation, he’s cut spending while the central bank has kept its benchmark rate above inflation. Massa also deployed a wide range of price controls to temporarily put a lid on some of the increases, while keeping Argentina’s volatile exchange rates relatively steady.

Still, economists in Argentina aren’t optimistic. They forecast inflation finishing this year at 98%, despite Massa’s budget forecast for 60%, and economic growth to grind lower to less than 1% this year. 

Another key factor influencing inflation this year is whether Massa and the government will continue to comply with the nation’s $44 billion agreement with the International Monetary Fund during an election cycle where the Washington-lender, unpopular in Argentina, will likely be criticized. The government met the year-end targets, advancing the IMF deal another step forward. 

Read More: Tourists Pay With Wads of Cash as Argentina Inflation Nears 100%

--With assistance from Scott Squires.

(Updates with central bank rate decision in third paragraph)

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