- August CPI of 0.2% is down from 2% in June and 3.1% in July
- High court ruling on rolling back gas tariff increases cited
Argentina’s monthly inflation decelerated at the fastest pace this year after the government was ordered by the Supreme Court to temporarily roll back gas tariff increases.
Consumer prices in the greater Buenos Aires area rose 0.2 percent in August, down from increases of 2 percent in July and 3.1 percent in June, the national statistics agency said in a report. After taking office in December, President Mauricio Macri suspended publication of inflation data pending an overhaul of the country’s economic statistics which the International Monetary Fund has said were inaccurate under the previous government.
August’s inflation figure may prove to be a boost for Macri as he hosts a three-day business forum to attract investment to Argentina after a decade of financial isolation. Still, inflation is likely to accelerate in the coming months as the government gradually reintroduces gas price increases as Macri seeks to narrow a bulging budget gap. The statistics agency, known as INDEC, pointed to the role of the tariff ruling on last month’s results and indicated that September consumer prices may be moderated as well.
"The result reflects the change in natural gas tariffs for residential users from the past 14 days," the statistics agency said in its report. "Consequently, September’s results will also be partially affected by this change."
The Supreme Court ordered the government to reinstate subsidies, reversing gas price increases for residential clients back to March 31 levels until public hearings are held to discuss how the tariffs are calculated, according to a statement.
Inflation has soared this year after Macri removed currency controls, causing a 30 percent devaluation of the peso, and removed subsidies on energy bills, sending prices up by more than 500 percent.
The IMF said on Aug. 31 that it will probably lift its motion of censure on Argentina by November after praising the statistics agency for correcting inaccuracies in its data. Under the previous government, official surveys regularly reported inflation at about half of what private economists estimated.