Argentina: Inflation continues its descent in July
August 11, 2017
According to the National Statistics Institute (INDEC), consumer prices in the Greater Buenos Aires capital area rose 1.7% in July from the previous month, up slightly from June’s 1.4% increase but undershooting market expectations of a stronger 2.0% increase. Data for the monthly variation in consumer prices for the whole country in July showed that consumer prices also rose 1.7% from June, above last month’s 1.2% increase. The result mainly reflected higher prices for housing, water, electricity, gas and other fuels, alcoholic beverages and tobacco, and health services.
According to INDEC, inflation in the Greater Buenos Aires capital area in July came in at 21.5%, below June’s 21.9%. Inflation thus still lies above the Central Bank’s 12.0%-17.0% target for this year. At its 8 August meeting the Central Bank of Argentina decided to keep the 7-day Repo Reference Rate unchanged at 26.25%, in an attempt to keep the disinflationary process going.
The latest data compiled by the Statistical Institute of the City of Buenos Aires show that inflation slowed from 23.4% in June to 22.9% in July, the lowest reading in over four years. Still-high inflation came mainly on the back of higher prices for housing, water, electricity and other fuels, food and non-alcoholic beverages and restaurants and hotels, although prices for all three sub-sectors rose at a slower pace than in the prior month. The different inflation data released by the Statistical Institute of the City of Buenos Aires and INDEC are not comparable, as the two index structures are not homogeneous. This is due to different baskets of goods, samples and data collection methodologies.