Argentina Inflation


Argentina: Increase in consumer prices continues to moderate in November

December 16, 2014

Consumer prices increased 1.1% over the previous month in November, according to the new inflation index elaborated by the National Statistics Institute (INDEC). The reading came in below the 1.2% increase recorded in October and was in line with market expectations. November’s result reflected price increases in all of the components that comprise the index. The highest increases were registered in clothing, food and non-alcoholic beverages, and transport. Conversely, housing and leisure activities posted smaller rises.

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 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 sharing the downward trend 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 November (October: +2.3% month-on-month). Annual inflation inched down from 41.3% in October to 40.5% in November.

LatinFocus Consensus Forecast panelists see official inflation at 25.1% by the end of 2014, which is down 1.2 percentage points from last month’s estimate. Panelists estimate that official inflation will ease to 24.5% in 2015, which is down 0.4 percentage points from last month’s estimate. Forecasts for the non-official inflation gauge point to even higher figures. The panel expects non-official consumer prices to increase to 38.4% in 2014, which is up 0.9 percentage points from last month’s forecast. Analysts see non-official inflation slowing to 35.3% in 2015, which is down 0.5 percentage points from last month’s Consensus.

Author:, Economist

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