MercoPress. South Atlantic News Agency

Twelve month inflation expectations in Argentina soar to 32.8%

Inflation expectations among Argentine consumers for the next twelve months reached 32.8%, the worst since the strong recovery of the country's economy begun in 2002/03, according to the monthly report from the Di Tella University released Wednesday.

The report based on public opinion polls from the country's main urban locations show that as has happened on the three previous months, the 12 month inflation expectation index has kept advancing and now stands at 32.8%, and 1.7 points ahead of February. The poll on inflation expectations with data collected in April shows that Buenos Aires City consumers anticipate a 12 month inflation of 31.2%; Metropolitan Buenos Aires, 33.9% and the rest of the country, 31.8%. However most analysts consulted on inflation expectations by the Argentine Central Bank replied that the twelve month period will be of one digit, which represents the largest gap between both indexes since they began to be compared. Macroeconomic analysts interviewed by the Central Bank forecast a 9.7% inflation increase on average which represents a difference of 23.1 percentage points with consumers' expectations. Apparently the extreme gap could be attributed to the manipulation of official numbers at Argentina's Statistics and Census Office, (Indec), which should act as a reference for the entire economy but under the Kirchners administrations, has turned into a political instrument and its figures are not taken seriously by business, unions or consumers in general. Furthermore the disappointment with growing inflation expectations seems to reach all sectors, particularly those in the lowest income bracket where twelve month inflation expectations average 30.8%; at the high income bracket the percentage drops to 25%, which still is significant compared to the one digit estimate of macroeconomic analysts.