Data from the INDEC national statistics bureau showed that prices rose three percent in July, pushing the annual inflation rate officially past the government’s 2021 Budget.
The news came as little surprise, with analysts expecting the 29 percent official forecast to be wiped out sooner rather than later. According to INDEC data, the cost of living has already risen by 29.1 percent in the first seven months of the year. Over the last 12 months, prices have risen 51.8 percent.
While acknowledging that its annual target had been broken, Argentina’s Economy Ministry said in a statement that inflation had “slowed down for the fourth consecutive month” (inflation was 3.2 percent in June, 3.3 percent in May, 4.1 percent in April and 4.8 percent in March), and highlighting that it was the lowest monthly rate since last October, when prices rose 2.8 percent.
The Palacio de Hacienda observed that “core inflation fell from 3.6 percent in June to 3.1 percent in July; while regulated prices fell from 3.2 to 1.4 percent."
Economy Minister Martín Guzmán's revised estimate of an annual rate of 33 or 34 percent now looks likely to be exceeded.
According to the most recent Central Bank market expectations survey, which consults more than 42 sources including banks, consultancy firms and research centres, analysts expect inflation to close out the year at 48.2 percent.
The biggest monthly increases for July were seen in restaurants and hotels, up 4.8 percent, thanks to a brief tourism boom for the winter break, and healthcare, which rose 3.8 percent. Goods and services were up 3.2, alcoholic beverages and tobacco, and recreation and culture, both increased 3.1 percent.
The smallest increases were in clothing and footwear, up 1.2 percent and communications, up 0.4 percent.
Speaking Wednesday, prior to the publication of the figures, Alberto Fernández said that “inflation is a very serious problem for the country” and that it was a result of "a very perverse business conscience" in which business leaders try to "take advantage."
Describing it as “a disgrace,” the president decried the fact that “business solidarity does not exist.”
Argentina’s economy has been in recession since 2018. Gross Domestic Product (GDP) collapsed 9.9 percent in 2020 as economic activity plunged amid the Covid-19 pandemic.