Buenos Aires Has Deflation After Supreme Court Gas Rulingby
Prices fell 0.8% in Aug.: Buenos Aires statistics agency
Results are boon for President Macri in search of investment
Prices in Buenos Aires city fell for the first time since its statistics agency began measuring inflation after the Supreme Court ordered the government to roll back gas tariff increases.
Consumer prices fell 0.8 percent last month after a 2.2 percent decline in July, according to the city’s statistics agency. The annual inflation rate also fell for the first time to 43.5 percent from 47.2 percent, while core inflation also slowed to 1.6 percent. The government has laid out plans to increase gas prices more gradually once it carries out public hearings ordered by the Supreme Court.
The result is a boon for President Mauricio Macri as he tries to attract investment to Argentina after 12 years of isolation under his predecessors, the Kirchners. About 2,000 investors will meet at an business forum organized by the government that aims to boost long-term investment in South America’s second-biggest economy.
Macri has been trying to reduce fiscally-costly subsidies on utility bills and public transport as he seeks to close one of the largest budget deficits in decades. The majority of subsidies are concentrated in the greater Buenos Aires area.
The battle to fight inflation has come at a cost for economic growth after the central bank raised benchmark interest rates to as high as 38 percent this year.
The national statistics agency, INDEC, will publish results of its own consumer price index for the greater Buenos Aires area on Tuesday.