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Argentina's inflation index in May, 1.4% and 13.5% in five months

Monday, June 16th 2014 - 00:35 UTC
Full article 5 comments
“We saw a strong deceleration overall but it was the category of food and drinks that particularly interested us” said Kicillof “We saw a strong deceleration overall but it was the category of food and drinks that particularly interested us” said Kicillof

Argentina's consumer price index revealed an inflation rate of 1.4% for May, down from 1.8% in the previous month announced on Friday Economy Minister Axel Kicillof at a press conference held at the Ministry in Buenos Aires. In the first five months of the year inflation stands at 13.5%.

 “We saw a strong deceleration overall but it was the category of food and drinks that particularly interested us” said Kicillof who went on to criticize the hike registered in medicines and generic drugs.

“The case of generic drugs is an important one, as people are captive consumers, and we also had negotiated maximum prices for those products. Some businessmen have clearly violated the negotiation,” he explained.

The Economy Minister also blasted the “Congress index”, released by opposition political referents, based on an average from private agencies and which said May’s inflation rate was 2.3% and 39.9% in the last twelve months.

“That index is unprofessional,” said Kicillof, and praised the new INDEC elaborated index, which has been okayed by IMF’s Christine Lagarde.

A sharp devaluation in January stoked inflation as Argentines, who often think in dollars because they lack faith in their own currency, raised prices to adjust to the new exchange rate. It also boosted the cost in pesos of imported goods.

Private economists say Argentina's inflation rate may be more than 30% in 2014, compared with about 25% last year.

Argentina revamped its consumer price index this year in a bid to win back the trust of investors after years of blatantly underreporting inflation.

The government has implemented unconventional measures such as supermarket price caps in an attempt to control rampant inflation, while the central bank has hiked interest rates, tightening monetary policy.

However independent economists say the key issue is excessive deficit spending and that the government needs to cut back expenditure and keep wage hikes under control.

Categories: Economy, Politics, Argentina.

Top Comments

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  • Anglotino

    Can someone do the math for me please.

    The Congressional Index says 39.9% for the past 12 months.

    Kicillof says 13.5% for the past 5 months.

    It seems to me that Argentina's “new INDEC elaborated index, which has been okayed by IMF’s Christine Lagarde” is still accelerating for over 30% this year.

    13.5% sounds so low. However it is going to get harder and harder for Kicillof to make the number sound low and reasonable as the year goes on.

    Jun 16th, 2014 - 02:57 am 0
  • golfcronie

    I am definately not an economist but how long can a countries currency last if inflation is 30% plus per year , year on year. No wonder the population are demanding 35% pay rises, surely something has to be done. Answers to KILLITOF
    C/o Casa Rosada as he obviously hasn't a clue.

    Jun 16th, 2014 - 07:08 am 0
  • yankeeboy

    The IMF hasn't okeyed anything. They said it was on the fight track and they're going to evaluate it for a year.
    The Ks ate such liars or they don't understand English. Or both.
    The IMF also warned them not to use price controlled item in the calculations and clearly they are.
    Tick tock tick tock

    Jun 16th, 2014 - 11:17 am 0
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