Argentina: Annual inflation ends 2014 at 23.9%
January 19, 2014
Consumer prices increased 1.0% over the previous month in December, according to the new inflation index elaborated by the National Statistics Institute (INDEC). The reading came in below both the 1.1% increase recorded in November and the 1.1% rise that the markets had expected. December’s reading mainly reflected higher prices for food and non-alcoholic beverages, clothing and leisure activities. In annual terms, inflation ended 2014 at 23.9%.
The new inflation index measures prices nationwide, whereas readings prior to February 2014 were based solely on Buenos Aires and the surrounding metropolitan area. The new 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 was 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.
The new inflation figures, however, have not completely dispelled suspicions of underreporting, as the price increases that the INDEC has reported are far below local private analysts’ independent estimates. Despite also recording a downward trend as is exhibited by the official figures, the so-called “Congress Index” (IPC-Congreso), which is an alternative inflation gauge based on independent estimates that opposition lawmakers collect, increased 1.9% over the previous month in December (November: +1.9% month-on-month).
Author: Cecilia Simkievich, Economist