MercoPress. South Atlantic News Agency

Argentina's official inflation in course to one digit target

Argentina's Consumer Price Index increased 0.7% in November totaling 8.7% so far this year according to the latest release from the Statistics and Census Office in Buenos Aires.

This represents a big boost for President Kirchner administration's target of ending 2006 with one digit inflation.

In 2005, inflation reached 12.3%, double the 2004 index. The federal budget established a working target of 9.1% for the twelve months of 2006.

In November 2005 consumer prices soared 1.2%.

According to the official release in November 2006, Food and Beverage experienced the most significant increase 1.4%, with education actually receding 0.1% and leisure remained unchanged, compared to October.

Wholesale prices so far this year have risen 6.6%

However in spite of the encouraging figures, public opinion is not entirely convinced or are farmers, retailers and representatives of other industries.

The Kirchner administration has forced (bullied) different industries to keep the level of prices unchanged; energy and public utility rates remain frozen and currently farmers are on a week long national strike to protest government interference.

Beef and certain cereal exports have been limited or temporary banned each time soaring international prices have an impact in the average Argentine food basket.

"This policy resents production and conditions mid and long term investment", argue the Argentine farmers association.