Argentina: Inflation declines in November
December 14, 2017
According to the National Statistics Institute (INDEC), consumer prices in the greater Buenos Aires capital area rose 1.2% in November from the previous month, a notch below from October’s 1.3% increase. Core consumer prices in the Buenos Aires metropolitan region picked up slightly from 1.1% in October to 1.3% in November. Inflation in the greater Buenos Aires capital area declined from 22.9% in October to 20.9% in November, remaining above the Central Bank’s 12.0%–17.0% target for 2017.
Data for the month-on-month variation in consumer prices for the entire country showed that consumer prices rose 1.4% in November from the previous month, coming in just below September’s 1.5% rise. The result reflected higher prices for all main components of the index, with prices for transportation increasing the most. Core consumer prices, which exclude volatile and non-regulated products, rose 1.3% month-on-month (October: +1.3% month-on-month).
The latest data compiled by the Statistical Institute of the city of Buenos Aires showed that inflation in the city of Buenos Aires decreased from 24.5% in October to 23.6% in November. The 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 homologous. This is due to different baskets of goods, samples and data collection methodologies.
Stubbornly high inflation is a persistent problem for the government, since it will have to continue accumulating external debt to finance the fiscal deficit, which remains elevated. The most recent Central Bank estimate for inflation, released in early December, sees inflation picking up in December on higher prices for fuel and for public services. The inability to anchor inflation to the Central Bank targets implies that short- and mid-term estimates of government spending, earnings and the fiscal deficit could be underestimated.
Argentina Inflation Forecast
Panelists surveyed for this month’s LatinFocus report expect inflation in the province of Buenos Aires to be 21.5% at the end of 2018, which is unchanged from last month’s estimate. Panelists estimate that inflation will end 2019 at 14.9%.