ARGENTINA – Inflation spikes in September

Juan Barboza & Diego Ciongo


Consumer prices rose by 3.5% mom in September, above market expectations according to the Bloomberg and central bank surveys, which pointed to price hikes of 3.0% and 2.8%, respectively. The 12-month inflation reading rose to 52.5% in September (from 51.4% in August), while annualized quarterly inflation increased to 42.5% in September (from 40.8% in August).

Core inflation increased but was below the headline reading. Core inflation came in at 3.3% mom (57.0% yoy), led by private medical services and food items. Annualized core inflation came down to 45.4% in 3Q21 from 47.1% in the quarter ended in August. Prices for regulated items rose by 3.0% mom and 38.6% yoy, affected by an adjustment in cigarette prices. Prices for seasonal products increased by a hefty 6.4% mom and 50.8% yoy in September, affected by hikes for apparel and footwear products.

We are keeping our full-year inflation forecast at 49% despite the government’s recent decision to freeze prices for 1,300 products, mostly food items. We expect the central bank to continue to curb the depreciation of the ARS through controls at least until the midterm elections (mid-November), creating further relative price misalignments.  

Juan Carlos Barboza
Diego Ciongo