NASDAQ (Reuters) – Argentina’s consumer prices likely rose 2.3% in February versus a month earlier, according to the average from a Reuters poll of analysts, though inflation was seen picking up in coming months amid more expansive monetary policy to bolster growth.
Amid a severe economic crisis inflation reached 53.8% in 2019 and experts expect it to be around 40% this year, according to a report by the country’s central bank, a trend which has hampered domestic consumption and growth.
The new Peronist government of Alberto Fernandez is looking to rein in inflation via agreements with businesses and other sectors to hold down prices, though it is also hoping to stimulate growth with sharply lower interest rates.
The estimates of the nine analysts polled by Reuters ranged from inflation of 1.7% to a high of 4.1%, with a median advance of 2.1% for the second month of the year.
Natalia Motyl, of the consultancy Libertad y Progreso, said that food costs showed signs of rising, though added price freezes had helped “mitigate the inflationary impact”.
“(But) there is no trend towards a slowdown in inflation and it can be anticipated that this ‘spring’ period is not sustainable,” Motyl added, adding a recent acceleration in monetary supply would lead to future price rises.
Víctor Beker, director of the Center for New Economy Studies at the University of Belgrano, agreed that “monetary growth (…) is incompatible with any objective of reducing inflation.”
Argentina’s INDEC statistics agency is expected to release official data for February CPI on Friday.
(Reporting by Hernan Nessi; Writing by Adam Jourdan; Editing by Lisa Shumaker)
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