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ECONOMY | 14-06-2023 16:04

Consumer prices in Argentina rose 7.8% in May, reveals INDEC

Inflation over the last 12 months now totals 114.2%, according to government data, with prices up 42.2% in the first five months of the year.

Consumer prices rose 7.8 percent in May, the INDEC national statistics bureau revealed on Wednesday, marking a slight deceleration from the preceding month.

According to official government data, inflation since the turn of the year is 42.2 percent, with prices over the last 12 months now up 114.2 percent. 

Hikes in May were led by the housing, water, electricity and other fuels category, which soared 11.9 percent as a result of government-approved increases to rates. 

Close behind was restaurants and hotels, up 9.3 percent, and healthcare, which rose nine percent, mostly due to a rise in medicines and prepaid medical services.

Other categories topping eight percent were recreation and culture (8.4 percent) and alcoholic beverages and tobacco (8.4 percent).

In contrast to recent months, food and non-alcoholic beverages were for once at the lower end of the scale, rising 5.8 percent, compared to 10.1 percent back in April. 

Some items, however, recorded very steep rises last month, such as sugar, which rose 23 percent in just a month, and tomatoes, which jumped 38 percent. Rice (18 percent), peas (16.7 percent) and yerba mate (14 percent) also rose significantly. Over the last 12 months, the price of foodstuffs generally have risen 117.8 percent, said INDEC.

Education recorded the lowest hike in May of 4.9 percent. Core inflation came in at 7.8 percent, with seasonal prices increasing six percent. Regionally, the highest inflation rate of eight percent was recorded in Greater Buenos Aires and the Northeast, while at the other end of the scale, Patagonia recorded 7.3 percent.

Consumer prices increased 8.4 percent in April and Central Bank sources had forecast a slight slowing for last month. The Central Bank’s survey of market expectations had forecast a monthly rate of nine percent and an annual rate of 148.9 percent for the calendar year.

The deceleration of the consumer price index in May interrupted a five-month upward trend.

Private consultancy firms said that increases in prepaid health services, fuel, transport, education and utilities had all pushed up the monthly rate.

Inflation is one of the biggest challenges facing Alberto Fernández’s government, with incessant price hikes complicating the government’s position ahead of the presidential election in October. The president, who said Wednesday that inflation is “a very serious problem,” has decided not to run for re-election.

 "It is not possible to live with 100 percent inflation," he said in an interview with high-school students, pointing to Russia’s war in Ukraine and the economic legacy of his predecessor in office, Mauricio Macri, as cause for the problem.

"You can look at inflation, which is very high in Argentina, but you also have to look at what happened in the world. Inflation is largely due to the [Ukraine] war. In the country, inflation has doubled, but Macri left 55 points of inflation" behind, he argued.

News of the rate came as little surprise to the government, of course. Speaking prior to the release of INDEC’s data, Economy Minister Sergio Massa had forecast that the national rate would be “in line with inflation in the City of Buenos Aires,” which reached 7.5 percent in May.

Speaking on Tuesday, economist Fausto Sportorno said in a radio interview that he believes inflation is now stabilising at around eight percent a month.

"Inflation has been accelerating every month since November. But the positive data is that if in May it is around eight percent, we could be seeing a sign of stabilisation," he emphasised.

The expert predicted that May’s inflation rate would be between 7.5 and 8.5 percent with core inflation “remaining at around eight percent.”

 

– TIMES with agencies

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