Argentina Inflation


Argentina: Increase in consumer prices moderates in October

November 14, 2014

Consumer prices increased 1.2% over the previous month in October, according to the new inflation index elaborated by the National Statistics Institute (INDEC). The reading came in below the 1.4% increase recorded in September and undershot the 1.4% increase that markets had expected. October’s milder rise stemmed from a slower increase in most of the subcategories that compose the index, particularly in prices for food and non-alcoholic beverages, transport as well as in education fees.

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 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 2.25% in October over the previous month (September: +2.48% month-on-month). Annual inflation inched up from 41.1% in September to 41.3% in October, which represented the highest level since independent inflation records began in June 2011.

LatinFocus Consensus Forecast panelists see official inflation at 26.3% by the end of 2014, which is down 1.0 percentage points from last month’s estimate. Panelists estimate that official inflation will ease to 24.9% in 2015, which is down 1.6 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 37.5% in 2014, which is down 0.3 percentage points from last month’s forecast. Analysts see non-official inflation slowing to 35.8% in 2015, which is unchanged from last month’s Consensus.

Author:, Economist

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