Consumer prices in Argentina rose six percent in January, the INDEC national statistics bureau said Tuesday, accelerating from the previous month despite the renewal of a sweeping price control programme enforced by the government.
The news, another blow to President Alberto Fernández’s administration, means inflation has totalled 98.8 percent over the past 12 months – the highest officially recorded rate since 1991.
Argentina’s consumer price index is now heating up after slowing slightly in November (to 4.9 percent), recording similarly high rates to those recorded in September (6.2 percent) and October (6.3 percent).
In its 2023 Budget bill, the government forecast that consumer prices would increase 60 percent this year, though analysts consulted by the Central Bank’s monthly market expectations survey expect the figure to surpass 97 percent.
Argentina has recorded annual inflation rates of double digits for more than a decade, but price rises have accelerated sharply since 2018, when they increased 47.6 percent in the calendar year. In 2019, increases totalled 53.8 percent, while in 2020, in the midst of the Covid-19 pandemic, a rate of 36.1 percent was registered.
Over the last two years, inflation has shot up again, reaching 50.9 percent in 2021 and 94.8 percent last year.
January’s six-percent rise was a result of a 7.9 percent rise in the prices of seasonal products, 5.4 percent in core inflation and 7.1 percent in regulated services.
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Increases in January were led by a rise of nine percent for prices in the recreation and culture sector, mainly due to rises in tourism costs as a result of the holiday season and cable television services. That was followed by utilities (housing, water, electricity and other fuels) and communications, which rose eight percent.
Another notable rise was the 6.8 percent recorded for food and non-alcoholic beverages, a major component of Economy Minister Sergio Massa’s ‘Precios Justos’ scheme. Within the division, seasonal price increases for fruits, vegetables, legumes and pulses stood out.
Back in February, the official renewed his opt-in price control scheme for more than 2,000 key products, limiting increases to 3.2 percent a month.
Despite the agreement, the increase in food and non-alcoholic beverages exceeded the January guideline (6.8 percent vs. the four percent guideline).
The government briefed reporters that the agreement with firms and supermarkets is being honoured and that it will continue to check that companies are complying. However, there are many smaller stores such as grocers and neighbourhood stores that are not signed up to the programme.
The Economy Ministry announced this week that at least seven cuts of meat would be added to the scheme, with existing prices maintained until March 31 and allowed to rise 3.2 percent monthly thereafter.
Private analysts are sceptical that the government will be able to considerably lower prices to meet Massa's stated target of a monthly inflation of four percent in April.
The two sectors with the lowest price variations in January were clothing and footwear (up 2.3 percent) and education (up 1.1 percent).
The Greater Buenos Aires region was in line with the general price index with an exact rise of six percent, while the Cuyo region had the highest monthly inflation rate in the country at 6.4 percent.