Argentina inflation seen at year-low 3.2% in June, likely to reheat in 2nd half By Reuters

By Hernan Nessi

BUENOS AIRES (Reuters) – Argentina’s inflation rate likely clocked in at 3.2% in June, still high but edging down from earlier in the year, a Reuters poll of analysts showed as the country grapples with bringing down fast-rising prices that sap spending power and growth.

The 15 local and foreign analysts surveyed said, however, that the cooling trend could be reversed in the face of the mid-term legislative elections that the country will hold in November.

“There is a slight slowdown that began in May due to seasonal factors,” said Natalia Motyl, analyst at the Fundación Libertad y Progreso.

“This slowdown is expected to reverse as we get closer to the elections, when the uncertainty of the year causes a greater run against the peso.”

The estimates of the analysts surveyed ranged from a minimum Consumer Price Index (CPI) advance of 3.0% to a maximum of 3.6% for the sixth month of the year.

Argentina has been battling runaway inflation for years, with an annualized rate currently near an eye-watering 50%, far higher than the government’s 29% target for the year.

“It looks very difficult that this year’s inflation is not higher than that of 2020,” said Tobías Pejkovich, an economist at the Abeceb consultancy, referring to the 36% rise last year.

Argentina’s National Institute of Statistics and Censuses (INDEC) is scheduled to release official CPI data for June on Thursday afternoon.

Graphic: Battling inflation: https://graphics.reuters.com/ARGENTINA-INFLATION/qmyvmdzmjpr/chart.png