Monday, July 15, 2024

ECONOMY | 13-07-2023 16:07

Inflation in Argentina slowed to 6% in June, reveals INDEC

Prices have risen by 115.6% over the last 12 months and by more than 50% in the first half of the year, according to government data.

Inflation in Argentina slowed by almost two points in June to six percent, decelerating for a second consecutive month, according to official data released on Thursday.

The news, a rare boon for the government after months of soaring increases, comes as Economy Minister Sergio Massa attempts to tamper down prices ahead of next month’s primaries and October’s general election. 

Nevertheless, Argentina’s ongoing problem with inflation is evident if one takes a wider view: prices in Argentina have increased by 115.6 percent over the last year and by 50.7 percent since the turn of the year.

June’s figure was the lowest monthly rate since January and comes off the back of hikes of 8.4 percent in April and 7.8 percent in May. 

Private consultancy firms had mostly forecast a deceleration, though many cited a drop in economic activity as the cause. The most recent Central Bank survey of market analysts and economists had predicted a rate of 7.3 percent – significantly higher than the actual figure. According to the poll, Argentina will record an inflation rate of 142 percent this calendar year.

The Noticias Argentinas news agency reported that government officials were “relieved” by INDEC’s report and delighted that inflationary momentum had slowed, while recognising that the monthly figure is still high.

Still, it will add value to the government’s argument that its sweeping ‘Precios Justos’ price-control scheme is having an impact on hikes.

Speaking at a press conference on Thursday prior to the release of the data, Government Spokesperson Gabriela Cerruti said that Argentina is “facing a downward trend and a much lower number than the last measurement."

"This allows us to think that we are on a downward trend in inflation, which had had an impact in the first months of the year as a result of the drought," she added, referring to the historic dry spell that is expected to slash as much as US$20 billion off the country’s agricultural exports.


Leading increases

Topping June’s inflation data was the communications sector. Hikes totalled 10.5 percent, in most part led by government-approved increases in telephone and Internet services.

Next up was health, which rose 8.6 percent, again as a result of scheduled increases in the costs of medicine and prepaid health services. Utilities (housing, water, electricity, gas and other fuels) rose 8.1 percent, mainly due to increases in the cost of electricity.

Underlining the impact of government price controls, food and non-alcoholic beverages – which normally lead the categories recording the highest increases – rose by just over four percent. Notable rises were seen in bread, cereals, dairy products and eggs. Alcoholic beverages and tobacco registered hikes of 4.5 percent. Clothing and footwear was up 4.2 percent.

INDEC said that core inflation was 6.5 percent in June, with regulated prices rising 7.2 percent on average and seasonal prices up just 1.8 percent.

The impact was felt greatest in the Patagonia region (up 6.8 percent on average) with Greater Buenos Aires (5.8 percent) and Cuyo (5.3 percent) seeing the lowest average increases.



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