Argentine monthly inflation doubles to highest level since 2002: 6.9% (40.2% yearly).
Inflation in Argentina rose from 3.3% in March to 6.9% in April according to estimates released today by the economic consulting firm Elypsis for the City of Buenos Aires. Consumer prices, according to their estimate, rose 40.2% over the same time last year - the highest since the 2002 crisis.
The alternative, unofficial index is one of the few comprehensive estimates available for measuring Argentine inflation since the Macri administration decreed, just days after taking office last December, that official inflation figures not be released until September. Members of the centrist Renewal Front - which had initially supported the right-wing Macri administration - likewise revived the "Congressional CPI" estimate following Macri's statistical blackout decree; while their April index has not yet been released, their estimates as of March show a similar trend.
The annual rate of inflation in Argentina has risen steadily since President Mauricio Macri imposed a 40% devaluation on December 17, 2015 (a week after taking office). Inflation, a central Macri campaign theme last year, had already accelerated by 10 points as of March - from 23.5% in November 2015 to 33.5%. The 40.2% annual pace Elypsis estimated for April would make it the highest rate of annual inflation since December 2002, while the 6.9% monthly rate would make it the highest since the depth of the post-convertibility crisis in April 2002.
The jump in prices last month was mostly accounted for by the 200-300% increase in public utility rates and the 100% increase in public transport fares triggered by the Macri administration's decision to reduce public service subsidies. These hikes added around 5 points to consumer prices last month, or 70% of the total.
The public service hikes pushed inflation to 5.6% in the first week of April alone (the highest since 1991), after which it slowed to 0.5% a week. Accordingly, the report indicated that inflation in May should slow to between 2 and 3%. Even with this more moderate pace, however, inflation in 2016 will be far in excess of the "20 to 25%" goal set by Finance Minister Alfonso Prat-Gay and will instead probably match estimates by consulting firms and labor unions for a 40 to 50% rate this year.
Inflation meanwhile continues to push the economy deeper in recession as consumers' buying power erodes. The monthly retail sales estimate published yesterday by the Argentine Medium Business Confederation (CAME) showed that real retail sales fell 6.6% in April from the same time a year ago. As has been the case since February, sales fell most for appliances and electronics (-12.3%).
CAME director Osvaldo Cornide pointed out that the decline in sales might have been steeper were it not for the Ahora 12 (Now 12) big ticket item finance program enacted in 2014 by former President Cristina Fernández de Kirchner, as well as for the fact that many retailers are now liquidating inventory for the Southern Hemisphere winter.
Cornide noted that even so, "nothing could bring back the customers - not even window shoppers."
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