Argentina: Inflation moderates in February on the back of slowest monthly rise in almost four years
March 13, 2013
According to official figures, consumer prices for the Great Buenos Aires area added 0.5% over the previous month in February, which was down from the 1.1% rise recorded in January and marked the slowest monthly rise in almost four years. The reading came on the back of price freezes agreed in February by government officials and Argentina's supermarkets as well as home appliance retailers. Price freezes will expire on April 1, although there is a possibility of a 120 days extension. As a result of the subdued monthly increase, annual headline inflation slowed from 11.1% in January to 10.8% in February. LatinFocus Consensus Forecast panellists see official inflation at 11.0% by the end of in 2013, which is up 0.4 percentage points from last month's estimate. Next year, participants estimate official inflation will end the year at 11.6%.
Official inflation data published by the National Statistics Institute (INDEC), however, have been met with suspicion ever since a controversial methodological change was implemented in 2008. The government has repeatedly denied allegations that INDEC data are manipulated and, in March 2011, went a step further by fining a number of consulting firms for publishing their inflation estimates. Eventually, on 1 February, Argentina became the fist country ever to be censured by the International Monetary Fund (IMF) for not supplying accurate economic data, under a procedure that can end in "compulsory withdrawal" from the IMF.
Consumers, however, share private analysts' more realistic inflation assessments. According to a Universidad Torcuato di Tella (UTDT) survey conducted in February, households believe that consumer prices will increase 30% over the next 12 months, unchanged from the result reported in January.
Author: Armando Ciccarelli, Head of Data Solutions