MercoPress. South Atlantic News Agency

June's CPI rose 5.3% in Argentina

Batakis conveys anything but confidence to Argentines who keep buying as many US dollars as they can

Argentina's National Institute of Statistics and Census (Indec) Thursday released its monthly report, which showed that the Consumer Price Index (CPI) had risen 5.3% in June 2022, after a 5.1% increase in May for a 64% yoy adjustment and 36.2% in the first half of 2022.

Healthcare expenses topped the list of items going up with a 7.4% monthly increase, followed by utilities and fuel (6.8%).

Inflation was also boosted by food and non-alcoholic beverages. The Greater Buenos Aires was the area with the highest monthly increase (5.5%); while the lowest figures were recorded in the Northeast (4.9%).

Thursday's figures were released after authorities adjusted the PAIS tax to even the official exchange rate between the Argentine peso (AR$) and the US dollar (US$), which keeps escalating daily amid growing uncertainty and further restrictions.

Economy Minister Silvina Batakis said last week that “it would be very unprofessional of me to risk saying today what the inflation projection is in this unprecedented situation of global imbalance” and blamed the armed conflict in Ukraine for the constant rise in the price of agrifood, which affected inflationary projections.

Meanwhile, the “blue” (unofficial) dollar traded in Buenos Aires Thursday at AR$ 279 / AR$ 289 (buy/sell), thus widening yet again the gap to between 113.7% and 126% (or higher)with the official quotations that the tweaking of the PAIS tax sought to correct.

Batakis insisted she would abide by the goals agreed upon with the International Monetary Fund (IMF) while making other adjustments to the administration's disbursements and hiring. “We are not going to spend more than we have,” she promised.

The Argentine peso is going through a daily informal devaluation affecting households nationwide since the chain of supplies to retailers is stopping deliveries out of fear that the goods might end up underpriced in US dollars at the end of the day. Argentina has already lived through a similar crisis in 1989, which resulted in the resignation of then-President Raúl Alfonsín due to his inability to control inflation.

For some Argentines, there is some sort of deja-vu regarding the US dollar and the impending official devaluation the Government is reluctant to acknowledge.