Argentina: Inflation slows down considerably in May but still exceeds the Central Bank's target
June 12, 2017
According to the National Statistics Institute (INDEC), consumer prices in the Greater Buenos Aires capital area rose 1.3% in May from the previous month, half April’s 2.6% increase and below market expectations of a 1.7% rise. The print mainly reflected higher prices for food and beverages, housing and basic services and home equipment and maintenance.
INDEC released inflation figures for Greater Buenos Aires for the first time in April, as it had collected twelve consecutive CPI readings and thus had the necessary base of comparison. Inflation in May came in at 24.0%, significantly below April’s 27.5% but still well above the Central Bank’s 12.0%-17.0% target for this year. May’s figure comes after the Central Bank of Argentina decided to keep the 7-day Repo Reference Rate unchanged at 26.25% at its 18 May meeting, sticking to a tight monetary stance.
The latest data compiled by the Statistical Institute of the City of Buenos Aires show that inflation slowed from 29.4% in April to 25.4% in May, the lowest reading since November 2015. Inflation came mainly on the back of higher prices for housing, water, electricity, food and non-alcoholic beverages, recreation and culture and clothing and footwear. The different inflation data released by the Statistical Institute of the City of Buenos Aires and by INDEC are not comparable, as the two index structures are not homogeneous. This is due to different baskets of goods, samples and data collection methodologies.