Inflation accelerated in April more than anticipated, underlining the government’s continued struggle to slow price hikes.
Consumer prices rose 4.1 percent last month, according to the INDEC national statistics bureau, outpacing private forecasts. Inflation in the first four months of the year now totals 17.6 percent. Annually, the rate is 46.3 percent.
April’s rate outpaced the estimates of most private economists and consultancy firms, who had generally forecast a figure of 3.8 percent or higher. Analysts surveyed by Bloomberg had predicted a rise of four percent, while forecasting that year-end inflation will be 47.3 percent.
The sustained rise continues to undermine the Alberto Fernández administration’s annual target of 29 percent, outlined in the 2021 Budget. Economy Minister Martín Guzmán said last month that inflation would slow down in April after peaking for the year in March and officials in the portfolio highlighted to reporters that there had indeed been “a slowdown compared to March, which had been 4.8 percent.”
The government is struggling to revive a stuttering economy that has been in recession since 2018 and suffered a record contraction of 9.9 percent in GDP last year amid the coronavirus pandemic.
The government is seeking to restructure payments due on a US$44-billion debt with the International Monetary Fund, as well as more than US£2.4 billion due to the Paris Club later this year. Fernández and Guzmán were ending a European tour on Friday, during which they sought support from world leaders for their attempts to secure new deals that will aid Argentina’s return to growth.
Inflation last year totalled 36.1 percent, lower than the 53.8 percent recorded in 2019.
Clothing, transport lead way
April’s rise in consumer prices was led by clothing prices, up six percent from March, and transportation costs, which rose 5.7 percent. The latter was influenced by an increase in the Subte fare, said INDEC, as well as rises in the price of vehicles, fuel and taxi fares.
Food and non-alcoholic beverages in general were up 4.3 percent on the previous month, with the same increase registered in home equipment and maintenance. Utilities were up 3.5 percent, with healthcare slightly higher at 3.7 percent.
The rise in food prices was mainly lead by increases in milk, dairy products, eggs, oils, fats and butter, infusions such as coffee, tea, herb and cocoa, bread and cereals and meats and derivatives. The most moderate increases were registered in
seasonal products such as fruits and vegetables.
Expanding on this, Economy Ministry officials pointed out that food prices were down 0.3 points from March, while clothing and footwear dropped more than four points to six percent from 10.8 percent.