Argentina: Inflation soars to highest level in almost two years
November 14, 2012
In October, consumer prices for the Great Buenos Aires area added 0.8% over the previous month, which was slightly down from the 0.9% rise recorded in September. The monthly increase was driven by higher prices for clothing and footwear as well as for household equipment and maintenance. As a result of the monthly rise, annual headline inflation picked up from 10.0% in September to 10.2% in October, marking the highest level since January 2011. Official inflation data published by the National Statistics Institute (INDEC) has been met with suspicion ever since a controversial methodological change was implemented in 2008. As a result, private sector analysts report their own independent inflation estimates, which differ notably from the official figures. 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. Against this backdrop, since June 2011 a group of opposition lawmakers have been elaborating a monthly inflation estimate based on the analysis of various private consulting firms. According to this so-called "Congress Index" (IPC-Congreso), consumer prices increased 1.8% over the previous month in October, down from the 1.9% recorded in September. As a result, inflation rose from 24.3% in September to 24.6% in October, marking the highest level since May 2011. Consumers share private analysts' more realistic inflation assessments. According to a Universidad Torcuato di Tella (UTDT) survey conducted in October, households believe that consumer prices will increase 27% over the next 12 months. That said, the reading was down from the 30% reported in September and marks the lowest level in the last eight months.
Author: Armando Ciccarelli, Head of Data Solutions