Argentine consumer prices will rise about 30 per cent in 2014, according to a poll of five analysts on Tuesday, the highest rate since 2002, when millions in the middle class were pushed into poverty by a crisis punctuated by 41-per-cent inflation.
In the 12 months through November, the government says Argentine consumer prices rose 10.5 per cent. But the country’s official statistics are widely seen as unreliable. Private analysts say inflation is running at more than twice the official rate, reaching 25 to 26 per cent in full-year 2013.
For this year, three of the analysts polled said they expect 30 per cent inflation, while two forecast 28 per cent.
In Latin America only Venezuela, with inflation of 56 per cent last year, has a worse problem with consumer prices.
Inflation has hurt the popularity of Argentine President Cristina Fernandez, who has consistently played down the issue and refuses to tighten fiscal policy to confront it.
Argentine inflation has also been fuelled by the country’s weakening peso currency.
“This month we expect inflation to scale another step,” said a recent report from the CEMA university in Buenos Aires, which cited higher energy and transportation prices among other factors fuelling consumer price increases.
Argentina’s peso slid to record lows this month as supermarkets froze prices in a deal with the government aimed at shielding poor families from one of the world’s highest inflation rates.
The year-long price fix on 200 basic food products that came into force last week signalled continuation of Fernandez’s interventionist policies even as polls show her image has been battered by the galloping inflation, falling central bank reserves and electricity shortages.
Heavy currency and trade controls as well as the 2012 nationalization of top energy company YPF have taken a toll on confidence. The electricity grid, ailing from lack of investment, has failed in recent weeks to keep air conditioners going at the height of the Southern Hemisphere summer.