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Sunday, June 26, 2022

Argentina: inflation loosens in May, but accumulates 60% annual

BUENOS AIRES ( Associated Press) — Argentina reported inflation of 5.1% in May, the lowest since February, but analysts fear it will be a momentary truce due to the impact on prices of public service rate increases planned for the coming months and the instability of the foreign exchange market.

Although monthly inflation was lower than in March (6.7%) and April (6%), the price control policies of the government of Alberto Fernández have failed to moderate the markups on food and non-alcoholic beverages, which had an average increase of 4.4% last month, according to the report of the National Institute of Statistics and Censuses (INDEC) released on Tuesday.

Analysts attribute this phenomenon to the effect that Russia’s invasion of Ukraine had on international food and fuel prices on an economy that has been dragging chronic problems — fiscal deficit, indebtedness, shortage of dollars — for a long time.

This week, in addition, the price of the dollar in the informal exchange market resumed the upward path of the first months of the year —this Tuesday the currency traded an average of 224 pesos per unit, the highest since 2020—, a jump that will be transferred to the prices of products with some imported component.

On the other hand, increases in electricity and gas rates are expected for the second part of the year, which in the case of industries and businesses will also affect prices.

The National Institute of Statistics and Censuses (INDEC) identified the items health (6.2%), transportation (6.1%) and clothing and footwear (5.8%) as those that had the greatest increases in May.

The South American country accumulates an inflation of 29.3% so far this year. In the year-on-year comparison it increased 60.7%, which places it among the highest in the world.

“We have an obligation to fight against inflation so that the efforts and income of Argentines do not go through our fingers like water,” said Sergio Massa, president of the Chamber of Deputies and the only government representative who referred to the issue. after knowing the May index.

The Survey of Market Expectations (REM) carried out each month by the Central Bank projects an inflation of over 72% for 2022.

The opposition questioned the government’s inaction.

PRO, the party founded by former conservative president Mauricio Macri, expressed concern about “the persistent decline in the purchasing power of Argentines, caused by the unstoppable growth of inflation in the country as a consequence of the absence of a comprehensive plan and a policy of the government in pursuit of the stabilization of the economy and the recovery of investment and work.

World Nation News Desk
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