The INDEC national statistics bureau revealed Wednesday that its Consumer Price
Index (CPI) recorded a 3.4 percent increase
last month. The news is a boost to the government, six months before October’s elections.
It’s the first deceleration in the pace of inflation this year, coming in lower than rates in
March (4.7 percent) and February (3.8 percent), but higher than January (2.9 percent).
In the first four months of the
year, inflation has reached 15.6
percent. Prices have increased by
55.8 percent in the last 12 months.
The figure was lower than the
expectations of most analysts,
most of whom predicted four percent and comes after the government reversed course last month
by halting unpopular austerity
measures that caused prices to
soar on public transport, electricity, water and gas bills. It also
brokered agreements with businesses to freeze prices on mobile
phone bills and 64 food and drink
items. The measures, justified by
officials as assistance to Argentines who have suffered a brutal
recession for two years, came just
six months before the general
election, in which the president
will seek re-election.
Central Bank Governor Guido
Sandleris said Wednesday that
April inflation represented “a significant drop” from the previous
month and that he expects inflation to continue to slow. Sandleris
has tightened monetary policy
four times since mid-March as
part of attempts to tame inflation.
“The economic forces that reduce inflation are already
showing results,” Sandleris said.
“We have a strict monetary policy
and we’re recovering basic macroeconomic stability.”
Argentina was rolling back
subsidies on utilities and transportation as part of a deal for a
record US$56-billion credit line
with the International Monetary
Fund. Officials at the Fund admit
that inflation has proven harder
to tame than initially expected
when the two sides brokered a
deal last June.
Inflation is also becoming a
barometer of Macri’s ability to
win a second term in office. As
prices have climbed in recent
months, his approval ratings have
dipped to the lowest levels of his
presidency. Several polls show
inflation is voters’ top concern
“April’s inflation, while still higher than desirable, should provide some relief to policy-makers,
after a long streak of upward inflation surprises,” economist
Construction at Ezeiza International Airport
Adriana Dupita, told Bloomberg
Some analysts said they saw
April’s number as a sign of things
to come. May’s inflation could be
around three percent, according
to Adrian Yarde Buller, head of
research at Buenos Aires-based
broker Grupo SBS. He forecasts
42 percent inflation for 2019.
“We expect the next quarters to
show lower levels of inflation,”
Yarde Buller wrote in a note following the inflation data.