Argentina: Annual inflation eases in March
April 20, 2015
Consumer prices increased 1.3% over the previous month in March, according to the inflation index elaborated by the National Statistics Institute (INDEC). The reading came in above the 0.9% increase recorded in February and slightly overshot the 1.1% rise that the markets had expected. March’s reading mainly reflected higher prices for education, transport and clothing. In annual terms, inflation continued to ease in March, declining to 16.5% from February’s 18.0%.
Argentina’s inflation index, which was introduced early last year, measures prices nationwide, whereas readings prior to February 2014 were based solely on Buenos Aires and the surrounding metropolitan area. The index was implemented in an effort to restore confidence in official inflation data, while also meeting the deadline that the International Monetary Fund (IMF) set in December 2013 requiring Argentina to release new GDP and inflation figures by March 2014. The previous inflation index had been viewed with suspicion both within the country and abroad for underreporting inflation figures, which prompted the IMF to censure Argentina for not supplying accurate economic data.
Suspicions of underreporting, however, have not been completely dispelled as the price increases that the INDEC has been reporting have been far below local private analysts’ independent estimates. The so-called “Congress Index” (IPC-Congreso), which is an alternative inflation gauge based on independent estimates that opposition lawmakers collect, increased 2.1% over the previous month in March (February: +1.5% month-on-month). In annual terms, the IPC-Congreso decreased from 31.4% in February to 29.8% in March.
Author: Cecilia Simkievich, Economist