Argentina: Inflation clocks in at 1.2% in October

Argentina: Inflation clocks in at 1.2% in October

Prices have climbed 21.4 percent so far this year, according to INDEC statistics bureau

Prices rose 1.2 percent in October, dropping 0.2 percentage points compared to September, according to the government’s consumer price index released yesterday by the INDEC statistics bureau. So far this year, prices have climbed 21.4 percent.

The government’s consumer-price index showed a decline in price hikes across the board, with decreases in most of the categories when compared to September. Garments rose 1.7 percent, education 0.6 percent, transports and communications 0.6 percent, food and drinks one percent and other goods and services 0.9 percent.

The relative exceptions to this slowdown included housing and basic services, which increased 2.1 percent, house maintenance that rose 1.4 percent, leisure activities that rose 1.8 percent and health care that increased 2.5 percent, as a consequence of the increase on private health insurance authorized by the federal government.

When added to an official inflation rate of 3.7 percent in January, 3.4 percent in February, 2.6 in March, 1.8 in April, 1.4 in May, 1.3 in June, 1.4 in July, 1.3 in August and 1.4 in September, the government estimates prices have risen 21.4 percent so far this year, exceeding the 10.4 percent that was estimated in this year’s Budget for the entire year.

The 1.2 percent inflation reported by INDEC still remains far from the estimates of private economists and opposition leaders, but the gap between both isn’t as large as it used to be. The so-called Congress Index, a figure calculated from private consultancies data, reported the inflation rate at 2.4 in October, 0.2 percent lower than in September and accumulating a 33.25 percent increase so far this year.

The lower levels of inflation in recent months comes combined with economic stagnation, which partly explains why the price hikes have slowed down. The economic activity index (EMAE) dropped 1.2 percent in August compared to the same month last year, accumulating two consecutive months with drops.

Looking closely at the report, the main hikes on food were seen in oil (2.1 percent), fruits (2.2 percent), spices (2.4 percent) and soups (2.8 percent). Meanwhile, looking at beverages, high increases were reported on bottled water (2 percent), beer (2.1 percent) and coffee (3.1 percent).

The federal government unveiled in October the fourth and last phase for this year’s Price Watch programme, which will last until January and authorized a price hike of about four percent. Eight companies were added to the programme along with 62 new products. Since the programme was unveiled in January 2014, the products included in it have gone up 11.9 percent.

Meanwhile, wholesale prices saw a 1.2 percent increase in October, accumulating a 25.9 percent growth so far this year. A 0.4 percent increase was reported on primary products, followed by 1.5 on manufactured goods and 1.6 percent on imported goods. Vehicles rose 2.2 percent, textile products 2.9 percent and paper goods 4.6 percent, among others.

Construction costs rose 0.9 in October percent and accumulate a 30.9 percent increase so far this year. Materials rose two percent, followed by general expenses (0.6 percent) and labour costs (0.3 percent).