Argentina’s annual inflation accelerated less than expected while economic growth picked up on a quarterly basis before the government revamped price controls.
Prices rose by 92.4 percent in November from a year ago, the highest rate in 30 years though less than the 94.2 percent median estimate in a Bloomberg survey, according to government data published Thursday. Monthly inflation cooled to 4.9 percent, the lowest level since February and well below analysts’ 5.9 percent median expectation.
Utilities and communications led price increases during the month, while food, the largest category, increased the least, according to the national statistics agency, INDEC.
The country’s gross domestic product rose 1.7 percent in the third quarter compared to April-June period. Consumer spending drove activity, which was faster than the one percent growth in the previous quarter. From a year ago, the economy expanded 5.9 percent, according to INDEC figures also released Thursday.
“Argentine inflation was significantly lower than expected in November — though too high to warrant a victory lap. We expect the central bank will continue to stress its focus on core inflation, which once again ran below the headline, and keep rates on hold for the time being," said Adriana Dupita, Brazil and Argentina economist for Bloomberg News.
Analysts forecast Argentina’s economy to expand 5.3 percent in 2022 with growth slowing to less than one percent next year amid a presidential election cycle and crop drought, according to the Central Bank’s most recent survey.
Economy Minister Sergio Massa relaunched a price control programme known locally as “Precios Justos” in November, temporarily freezing costs of over 1,700 goods. He also brokered agreements with gas stations, shoe retailers and industrial manufacturers on limits to fee increases. Central Bank officials see those agreements, along with high interest rates, helping to cool monthly inflation.
Annual inflation is expected to surpass 100 percent in December and remain near that level throughout next year, according to the Central Bank’s latest survey of private economists.
by Patrick Gillespie, Bloomberg