MercoPress. South Atlantic News Agency

August retail prices in Argentina dropped to 0,4%

Argentina's August consumer prices index dropped to 0,4%, the lowest so far this year accumulating 7,7% in the first eight months of 2005, according to the latest release from the Statistics and Census Institute.

However since the government's inflationary target for 2005 is between 8 and 10,5%, consumer prices for the rest of the year should keep below the 0,5% monthly index. Furthermore the August figure includes a worrisome fact: retail prices for the basic food basket actually increased 1,5% in August. The basic food basket is the main index to measure poverty and indigence in Argentina, which still represents almost half the population.

Although August index was a significant advance compared to July's 1% and June's 0,9%, the 1,4% increase in Food and Beverage was four times the average increase of the other items making up the consumer prices index and accumulates 9,4% in the first eight months, compared to the overall 7,7%.

Particularly influential in August were Vegetables and fruit 4,4%; dairy produce 2,9% and meats in general 1%. Similarly but with negative recordings were the end of season clothing sales, 1,3% and a considerable drop in leisure costs 2,9%, which in July were blamed for the 1% jump. Housing and basic services experienced a 0.7% increase; Education 0,5% and Transport and Communications 0,7%.

The wholesale prices index in August increased 1,3% and construction costs 0,8%.