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Inflation soars 2.9% in January surpassing private estimates

The higher than expected rate surprised many observers in the private sector, who had put the figure slightly lower at 2.5 to 2.8 percent.

Thursday 14 February, 2019
Inflation has traditionally been Argentina's most chronic economic problem.
Inflation has traditionally been Argentina's most chronic economic problem. Foto:File-Perfil

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Consumer prices in Argentina continued rising in January, ending the month on average 2.9 percent higher, according to INDEC statistics bureau data released Thursday.

The higher than expected rate surprised many observers in the private sector, who had put the figure slightly lower at 2.5 to 2.8 percent.

As the Mauricio Macri government approaches the October election, the key price index category of food and beverages saw some of the highest increases, with average prices ending January 3.4 higher.

Yet it was communications at 7.4 percent, hotels and restaurants at 3.7 percent, and recreation and culture at 3.5 percent, which topped the list.

Accumulated inflation in Argentina totalled 47.6 percent in 2018. This was Latin America's highest annual rate behind Venezuela, and Argentina's highest annual rate in 28 years.

Core inflation in January was stable at three percent, the INDEC reported, suggesting the Central Bank will maintain a hard line on monetary policy.

Clothing and Footwear was one of few sectors where prices dropped, in this case by 0.6 percent. Alcoholic beverages and tobacco rose 3.4 percent; while Housing, Electricity, Water and Gas all rose 3.1 percent. Healthcare prices, meanwhile, rose 2.9 percent. And transport prices rose 2.5 percent nationally but 3.3 percent in the Capital.

Government estimates now place inflation in 2019 at 28 percent, Economic Policy secretary Miguel Braun confirmed. It had previously calculated inflation at 23 percent, despite private estimates of 29 percent.

For its part, the International Monetary Fund (IMF) estimated a rate of 20 percent but announced in its last report that it would raise its estimates. The Central Bank's own survey of economists now sees inflation for the end of the year reaching 30 percent.

CITY DATA

Buenos Aires City also released its consumer price data on Thursday, reporting a whopping 3.8 percent rise in prices in January, or almost one percentage point higher than the national average.

The main increase was seen in regulated goods and services. These jumped 3.4 percent as a result of rising utility and public transport fees - the multibillion-peso subsidies on which the national government has slowly been rolling back since it took office in 2015.

In the capital, it was transport and public services, and food, which topped the list.

-TIME/AP/PERFIL

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