Argentina: Inflation inches down in December
January 14, 2011
December, consumer prices added 0.84% over the previous month, which was up from the 0.73% price increase registered in November. The price rise was broad-based, with all major categories rising over the previous month. That said, higher prices for recreation and culture as well as for clothing were the main drivers behind the December increase. Despite the monthly increase, annual headline inflation ended the year at 10.9%, a notch down from November's 11.0% but higher than the 7.7% inflation rate recorded at the end of 2009. Official inflation data published by the National Statistics Institute (INDEC) continue to be met with suspicion ever since a controversial change in the methodology to measure price variations was implemented over two years ago. However, confidence in the accuracy of inflation data may be restored soon. In December, an IMF mission visited Argentina in order to provide technical advice on the formulation of a new consumer price index. According to a 20 January statement, the IMF will present its conclusions and recommendations to Argentinean authorities by April. Consumers share this more realistic assessment of inflation. According to a survey from Universidad Torcuato di Tella (UTDT) conducted in January, respondents believe that consumer prices increased 30% over the last 12 months, a result which is almost triple the official result. Moreover, households believe that consumer prices will increase 25% over the next 12 months, which is down from expectations in December, when 30% of households anticipated such an increase.
Author: Armando Ciccarelli, Head of Data Solutions