Argentina's economy this year is expected to expand by no more than 1.5 percent, mainly because of lower commodity prices and waning demand from China for its agricultural goods. The government's policy of nationalizing private firms has also spooked investors.
Inflation estimated last year at 28 percent and projected to be even higher in 2014, forces rounds of wage and price negotiations. Hugo Moyano, one of Argentina's most powerful union leaders, recently said inflation is "eating up salaries" and "must be corrected and compensated."
The government recently eased tough restrictions on exchanging pesos for foreign currencies after they backfired by pushing many Argentines to buy dollars on the black market.
Independent economists say the government's pullback on currency controls is just a bandage for a wounded economy that needs to contain inflation by dialing back public spending. The government, in turn, blames banks, energy companies and big businesses, accusing them of speculating with the peso and raising prices to provoke instability.
Kicillof, now the economy minister, on Wednesday announced agreements with business leaders aimed at keeping the peso's sharp depreciation from leading to higher prices for consumer goods. Producers of steel, aluminum, metal products, petrochemicals and plastics are to hold prices to the levels of Jan. 21 a¿¿ the day before the peso's big drop.
Amid fears of even higher inflation, Argentines are seeking to protect their wealth by buying cars and real estate.
"I'm investing in my own house, building it with my husband. That gives me security because I don't have to pay rent that constantly goes through the roof," said Miriam Rodriguez, 35, a maid who lives on the outskirts of Buenos Aires. "Bricks are a good way of guaranteeing some stability."
Rodriguez said rising prices have forced her to make other changes. She's stopped buying clothes as well as top brands at the supermarkets, and she canceled her Internet and cable TV service. When she gets together for a dinner with friends, everyone brings their own food.