Argentina: Inflation inches up in October
November 14, 2013
According to official figures, consumer prices for the Greater Buenos Aires area added 0.9% in October over the previous month, inching up from the 0.8% increase recorded in September. Higher prices for clothing as well as for household equipment were the main drivers behind the increase in prices. Annual headline inflation rose slightly from 10.5% in September to 10.6% in October. LatinFocus Consensus Forecast panelists see official inflation at 10.5% by the end of 2013, which is up 0.1 percentage points from last month's estimate. Panelists estimate that official inflation will rise to 11.5% by the end of next year.
Official inflation data published by the National Statistics Institute (INDEC) have been met with suspicion since 2008 when a controversial methodological change was implemented. The issues resulted in Argentina being the first country ever to be censured by the International Monetary Fund (IMF) for not supplying accurate economic data. The resulting procedure could force Argentina's government into "compulsory withdrawal" from the IMF. In recent months, the government has been undergoing preliminary work to develop a new inflation index.
A group of opposition lawmakers began collecting independent inflation estimates in 2011 in order to develop an alternative monthly inflation gauge, which is referred to as the "Congress Index" (IPC-Congreso). According to this index, consumer prices increased 2.0% in October over the previous month (September: +2.1% month-on-month) and annual inflation rose from 25.4% in September to 25.9% in October, the highest level in nine months. Independent analysts surveyed by LatinFocus expect consumer prices to increase to 26.1% in 2013, which is up 0.1 percentage points over last month's expectation. For 2014, analysts see inflation rising to 29.1%.
Author: Armando Ciccarelli, Head of Data Solutions