January 16, 2018
Friday, May 12, 2017

City inflation stats cast doubt on targets

Data for April indicates 2.6 percent jump, pushing 12-month figure up to 27.5 percent

Consumer prices in the City of Buenos Aires rose by 2.6 percent in April, bringing the total for the year so far to 9.1 percent and 27.5 percent for the last 12 months.

The results cast further doubt on the Central Bank’s ability to reach its target of between 12 to 17 percent inflation in 2017.

Since the INDEC national statistics bureau restarted publishing a consumer price index for the City and Greater Buenos Aires in 2016 — after years of figures that were not credible — the annual inflation rate has been reported as 27.5 percent.

The 2.6 percent figure reported for April was higher than estimates by Congress and the FIEL consulting firm, and slightly higher than the 2.4 percent rate reported for March. Tellingly, the 2.6 percent increase is a combination of increases of core inflation of 2.3 percent, regulated goods and services of 3.7 percent and seasonal services of 2.5 percent.

Regulated goods and services such as utilities, health services, public transport) have increased in price by 13.9 percent compared to December 2016 and 35.6 percent in the last 12 months.

In comparison, core inflation has increased by a more modest 7.9 percent since December and 25.9 percent over 12 months. Core inflation is nonetheless a far greater determinant of consumer price inflation, as 17.32 percent of the annual inflation of 27.5 is due to core inflation.

Argentina’s Central Bank raised its benchmark interest rate to 26.25 percent on April 11, citing higher inflation expectations. The bank held the rate steady on Tuesday and said April inflation would be higher than desired but rise at a slower pace in May.

The bank is targetting 12-month inflation of 12 to 17 percent for the end of the year, though its latest survey of economists puts it at 21 percent.

Clothing garment prices rose 5.1 percent in April, while housing and basic services were up 4.6 percent, IINDEC said.

Increases in the prices of food and beverages were the biggest contributors to the overall increase in prices — responsible for 0.79 percent of the monthly inflation. In the first four months of the year the price of food and beverages has increased 3.15 percent and 10.09 percent in the last year. Food and beverages have a weight of just over 36 percent in the basket of goods used by the Indec to measure consumer prices.

Herald with Reuters

  • Increase font size Decrease font sizeSize
  • Email article
  • Print
  • Share
    1. Vote
    2. Not interesting Little interesting Interesting Very interesting Indispensable

  • Increase font size Decrease font size
  • mail
  • Print

    ámbito financiero    ambito.com    Docsalud    AlRugby.com    

Edition No. 5055 - This publication is a property of NEFIR S.A. -RNPI Nº 5343955 - Issn 1852 - 9224 - Te. 4349-1500 - San Juan 141 , (C1063ACY) CABA - Director Perdiodístico: Ricardo Daloia