Analysts forecast May inflation rate of 9.1%

Argentina’s inflation rate surpassed nine percent in May, according to a new forecast issued by an influential consultancy firm.

The Fundación Libertad y Progreso said this week that consumer prices likely rose 9.1 percent last month, a rise of 0.7 points on last month’s official rate issued by the INDEC national statistics bureau. If confirmed, it would be a sixth consecutive month of accelerating prices in Argentina.

According to the firm, accumulated inflation so far in 2023 is 44 percent, just five months into the year. In the first five months of 2022, prices rose 29.3 percent. Official INDEC data published earlier this month showed that prices have risen 108.8 percent over the last 12 months, with that figure likely to accelerate when May’s data is released.

The report from Fundación Libertad y Progreso highlighted surges in the prices of food and non-alcoholic beverages, which soared more than nine percent last month. “Food increases are very worrying because they strongly affect the values of the basic food basket, putting higher floors on the poverty line,” said the firm’s economist Santiago Casas.

“If it needed to be demonstrated again, the Precios Justos [price-control] scheme has failed and all it has achieved is greater distortions in the economy. Inflation is accelerating as uncertainty grows.”

He concluded: “To fix the problem, the next government will have the challenge of designing a stabilisation plan to restore confidence in the currency, or replace it with another.”