© Reuters. FILE PHOTO: A fruit seller looks on as he waits for customers outside a market in Salta, Argentina August 11, 2021. REUTERS/Agustin Marcarian
By Hernan Nessi and Jorge Iorio
BUENOS AIRES (Reuters) – Argentina’s Consumer Price Index rose 2.5% in August, the country’s official statistics agency said on Tuesday, the smallest rise in over a year as the government tries to tamp down inflation that has damaged its popularity.
The South American country is grappling with stubborn inflation that clocked in at an annual rate of 51.4% in the month, even as prices cooled on a month-to-month basis amid price control measures and caps on exports of beef.
The monthly increase compared favorably with the projections of 18 analysts polled by Reuters who had forecast an average rise of 2.8%, ranging from a minimum estimate of 2.5% to a maximum of 3.2%.
Consumer prices rose 32.3% in the first eight months of the year.
Argentine Economy Minister Martín Guzmán had said the monthly inflation rate would be lower than July’s 3% and that he expected it to keep falling in coming months.
However, Isaías Marini, an economist at consultancy Econviews, said: “Unlike what the government is saying, we expect inflation to overheat as we approach the end of the year to end at 49%.”
High inflation projections for the year are straining local savings and salary levels and are a headache for the government ahead of congressional elections in November.
The ruling Peronist party was dealt a blow on Sunday in a primary ballot, which showed the conservative opposition gaining votes in most regions.
“Persistently high inflation remains one of the key macroeconomic challenges facing the authorities, and a significant political liability for the government coalition,” said Goldman Sachs (NYSE:) analyst Alberto Ramos.
(Graphic: Battling inflation, https://graphics.reuters.com/ARGENTINA-INFLATION/qmyvmdzmjpr/chart.png)
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