Argentina inflation set to reheat despite battle to curb prices
RIO DE JANEIRO, BRAZIL – Argentina’s inflation rate is expected to have reheated in September, according to a Reuters poll of analysts, heaping pressure on the Peronist government as it looks to keep prices down ahead of crucial midterm elections in November.
The country’s consumer price index is likely to rise 2.9%, according to the median estimate of 18 local and foreign analysts surveyed, compared to a 2.5% increase the month before, breaking a downward trend in recent months.
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Argentina has been battling runaway inflation for years, with the current annualized rate near 50%, which saps savings, income, and economic growth. Inflation is also heating up globally, piling pressure on policymakers to control prices.
“We estimate that inflation in September was at least 3%, reversing the downward trend of recent months that was based on the exchange rate anchor and price controls, but which failed to change things,” said Isaías Marini, an economist at Econviews.
“We expect inflation to accelerate in the coming months to end the year at over 51%,” Marini said.
The government has taken steps to rein in prices. Earlier in the year, it imposed a strict limit on beef exports to bring down the domestic cost of meat, and this week, it struck a deal to freeze the price of some food and household goods for 90 days.
“The government made a great effort to try to reduce a little the CPI (consumer price index),” said Agustín Etchebarne of the Fundación Libertad y Progreso. “Despite this, inflation is still close to 3% monthly.”
Etchebarne added a “devaluation and inflationary jump” was expected after the November 14 legislative elections, where the government is expected to suffer heavy losses.
Analysts polled by Reuters forecast inflation in a range between 2.7% and 3.4%.
A central bank poll of analysts has forecast inflation for this year of around 48.2%, while the government has targeted inflation of 33% next year in its annual budget.
“The forecast of an annual inflation of 33% (for 2022) seems difficult to fulfill,” said Víctor Beker of the Center for Studies of the New Economy from the University of Belgrano. “A comprehensive anti-inflation plan for 2022 would be required, which would coordinate monetary, exchange, and income policy measures, which, for now, is not in sight.”
The official INDEC statistics agency will release the official CPI data for September on Thursday afternoon (14).
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