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Argentina Posts Slightly Higher Than Expected August Inflation

(Bloomberg)

(Bloomberg) -- Argentina’s monthly inflation rose slightly above expectations in August, representing a setback for President Javier Milei’s efforts to tame price increases while his austerity drive slashes generous public subsidies.

Consumer prices rose 4.2% in August from July, above the 4% median forecast of economists surveyed by Bloomberg. Annual inflation slowed to 236.7%, according to government data published Wednesday.

Utilities, education and transportation led all categories in price increases last month, while the largest category, food, remained below headline inflation. 

Bus fares in Buenos Aires jumped nearly 40% last month as Milei rolled back generous transport subsidies. Water, gas, electricity and fuel prices all picked up marginally as the president also reined in long-existing government aid. Consumer price prints for September may get some relief on the Milei administration’s decision to trim the country’s main import tax from 17.5% to 7.5%.

Milei’s victory lap is expected to continue, with economists forecasting that annual inflation will drop sharply to 44.7% in the next 12 months, according to a monthly survey conducted by the nation’s central bank. The central bank’s survey posted Sept. 5 shows economists expect annual inflation to fall to 122.9% by the end of 2024.

--With assistance from Rafael Gayol.

©2024 Bloomberg L.P.