Inflation in Argentina rises 3.2% in June, reaches 50.2% in 12 months

RIO DE JANEIRO, BRAZIL – The last time annual inflation in Argentina exceeded 50% was in February 2020. Since then, because of the economic devastation caused by the covid-19 pandemic, prices started to fall until they reached a low of 35.8% in November last year.

With economic activity picking up after easing measures to contain the virus, Indec has recorded seven consecutive months of CPI increases. Yet, despite the continuous advances, the result for June is the lowest for the year, indicating a deceleration in inflation, which in March reached 4.8%.

The budget for 2021 drawn up by the Argentine government foresees annual inflation of 29%. To meet the target, the CPI must fall to less than one percentage point in the coming months, according to calculations made by the newspaper “La Nación”. However, analysts estimate that monthly inflation will oscillate between 2.5% and 3%, exceeding 48% in December.

Argentine government officials have stressed in recent days that inflation in the country has been driven by rising food and commodity prices, something they describe as an “international phenomenon” amid the Covid-19 pandemic, which has altered consumption patterns in all countries.

The Minister of Productive Development, Matías Kulfas, said yesterday that the external factor had influenced the country’s inflation in recent months. However, he pointed out that since March, the CPI is already in a downward trend and that the government will work to maintain it in the coming months.

According to the Indec report, the prices of communication services rose the last month (7%) due to readjustments in mobile phone and internet bills. Food and non-alcoholic beverages were 3.2% more expensive, emphasizing the price increases of meat and meat products, milk and dairy products, among others.

Analysts indicated that the suspension of meat exports imposed by Alberto Fernández’s government also influenced the final inflation figure for food in Argentina in June.