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Argentina Inflation July 2023

Argentina: Inflation remains in triple digits in July

Inflation came in at 113.4% in July, which was down from June’s 115.6%. July’s result marked the weakest inflation rate since April, but was still one of the highest rates globally and the second highest on the continent after Venezuela’s.

Annual average inflation rose to 101.4% in July (June: 98.0%).

Lastly, consumer prices rose 6.34% in July over the previous month, picking up from the 5.95% increase logged in June but below market expectations.

Looking ahead, inflation will accelerate further given the Central Bank devalued the peso by roughly a fifth following the mid-August primary elections, with the parallel-market peso weakening in tandem.

Itaú Unibanco analysts said:

“While a devaluation was largely expected in the context of the IMF-staff level agreement, the timing and size had not been clear until now. According to media reports, the central bank will try to keep the FX unchanged until the presidential election on October 22. In our view, this goal is challenging given the low level of international reserves and the expected acceleration in inflation. The inflationary outlook has deteriorated significantly, and will likely exceed our inflation forecast of 160% by December.”

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