Argentina: Consumer prices continue to rise in September
October 21, 2014
Consumer prices increased 1.37% in September, according to the new inflation index elaborated by the National Statistics Institute (INDEC). The reading came in just above the 1.33% increase recorded in the previous month and was in line with market expectations. September’s print was driven by higher prices for clothing, health insurance, transport and entertainment.
The new inflation index measures prices nationwide, whereas readings prior to February were based solely on Buenos Aires and the surrounding metropolitan area. The new index was implemented in the hope of restoring confidence in official inflation data, while also meeting the deadline that the International Monetary Fund (IMF) set in December 2013 that required 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 below local private analysts’ independent estimates. According to the so-called “Congress Index” (IPC-Congreso), which is an alternative inflation gauge based on independent estimates that opposition lawmakers collect, consumer prices increased 2.48% in September over the previous month (August: +2.65% month-on-month). Annual inflation rose from 40.4% in August to 41.1% in September, which represented the highest level since independent inflation records first began in June 2011. In the press conference held after the release of the data, opposition members of the parliament stated that they are highly concerned that the cost of living has risen above the 40% threshold.
Author: Cecilia Simkievich, Economist