Argentina: Inflation picks up in June
June 14, 2013
According to official figures, in June consumer prices for the Great Buenos Aires area added 0.8% over the previous month, which was above the 0.7% increase recorded in May. Higher prices for healthcare as well as for household equipment and maintenance were the main drivers behind the price increase. As a result of the monthly rise, annual headline inflation inched up from 10.3% in May to 10.4% in June. LatinFocus Consensus Forecast panellists see official inflation at 10.3% by the end of 2013, which is down 0.2 percentage points from last month's estimate. Participants estimate official inflation to rise to 11.3% by the end of next year.
Official inflation data published by the National Statistics Institute (INDEC) have been met with suspicion ever since a controversial methodological change was implemented in 2008. These statistical issues have caused Argentina to become the first country ever to be censured by the International Monetary Fund (IMF) for not supplying accurate economic data, under a procedure that could force Argentina's government into "compulsory withdrawal" from the IMF. The government has repeatedly denied allegations that INDEC data are manipulated and went a step further in March 2011, fining a number of consulting firms for publishing their own inflation estimates.
Since 2011 a group of opposition lawmakers has been collecting independent inflation estimates in order to develop an alternative monthly inflation gauge. According to this so-called "Congress Index" (IPC-Congreso), consumer prices increased 1.63% over the previous month in June (May: +1.57% month-on-month) and annual inflation rose from 23.4% in May to 24.0% in June. Independent analysts surveyed by LatinFocus expect consumer prices to increase 26.3% in 2013, which is up 0.1 percentage points over last month's expectation. For 2014, analysts see inflation rising to 28.8%.
Author: Armando Ciccarelli, Head of Data Solutions