Argentina Inflation


Argentina: Annual inflation edges down in January

February 16, 2015

Consumer prices increased 1.1% over the previous month in January, according to the inflation index elaborated by the National Statistics Institute (INDEC). The reading came in just above the 1.0% increase recorded in December, but was below the 1.3% rise that the markets had expected. January’s reading mainly reflected higher prices for food and non-alcoholic beverages, and for clothing and leisure activities. In annual terms, inflation edged down from 23.9% in December to 20.9% in January.

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 January (December: +1.9% month-on-month). In annual terms, the IPC-Congreso eased from 38.5% in December to 35.2% in January.

LatinFocus Consensus Forecast panelists expect official inflation of 24.3% at the end of 2015, which is up 1.3 percentage points from last month’s estimate. Panelists estimate that official inflation will end 2016 at 26.2%. Panelists revised down their forecasts for non-official inflation, although their projections are still higher than official inflation expectations. The panel expects non-official inflation of 30.8% in 2015, which is down 3.2 percentage points from last month’s forecast. Analysts see non-official inflation slowing to 29.2% in 2016.

Author:, Economist

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