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Argentine inflation totals 3,4%; Stronger and stronger Chilean peso; November prices expand 0,16% in Uruguay

Argentine inflation totals 3,4%

Retail prices in Argentina during November increased 0,2% and 3,4% in the eleven months of 2003 according to the latest release from the Argentine Statistics Institute. Wholesale prices have accumulated 1% so far this year, while construction costs expanded 1% in November and 6,9% in eleven months. "We expected 0,4% in November that could increase to 0,7% in December because of a seasonal push, but overall 2003 inflation will remain in the range of 3,5 to 4%", admitted economist Orlando Ferreres to the Buenos Aires press. While in October fresh fruit and vegetables had the greatest impact in the basket of basic staples, in November it was mainly fresh fruit. However the index which most grew so far in 2003 has been clothing, 7,4%, and at the opposite end those with the least expansion are home maintenance and equipment 0,4%, and transportation 0,6%. "Inflation is no problem in Argentina currently. The year 2003 most certainly will end with a retail price expansion below 4%, when just twelve months ago, both in the public and private sectors, speculation was that inflation would reach between 20 and 30%", indicated economist Carlos Pérez from Fundación Capital.

Stronger and stronger Chilean peso

The US dollar could be dropping to 600 Chilean pesos by Friday according to Santiago money market analysts. The permanent appreciation of the Chilean peso, the strongest in the last 31 months, (695/607 pesos to the US dollar this Wednesday) was attributed to the bull market for copper, (Chile's main export), the falling US currency worldwide and promising prospects for the Chilean economy. Santiago money exchange market operated 309 million US dollars this Wednesday, 117 million less than on Tuesday but is expected to reach over 600 million US dollars this Thursday. The stronger peso means Chileans will be tempted to spend holidays overseas this coming season, but exports could be hindered because of higher costs.

November prices expand 0,16% in Uruguay

Retail prices in Uruguay during November expanded 0,16% totalling 9,47% in the eleven months of 2003 and 10,84% in the last twelve months according to the Uruguayan Statistics Institute. These figures are in line with the Uruguayan government target of an annual inflation of 11% compared to 25,94% in 2002. Uruguayan retail prices have been falling since last March, until August when the index jumped to 1,16% pushed mainly by meat prices. The reopening of foreign markets to Uruguayan beef since then has sent the price of cattle, meat and substitutes rocketing. Clothing and footwear in November increased 0,84% and transportation and communications 0,44%. Housing prices grew 0,24% and education costs 0,15%. Food and beverage dropped 0,15% in November, but with extremes, while fresh fruit jumped 14%, fresh vegetables actually dropped 20,17%. Inflation in US dollars in the first eleven months of 2003 reached 3,09% and in the last twelve months 4,13%. A similar statistic but elaborated by the Economy Department of the Uruguayan National University indicates that the retail price index for the lower income homes actually dropped 0,04% during November in Montevideo. This is because food and beverage actually dropped 0,24% last month. The lower income homes index is made up mainly of basic staples and expenses. However the lower income homes index during the first eleven months of 2003 reached 11,64% and 12,42% in the last twelve months.