July 28, 2014
In FebruarySaturday, March 15, 2014
Costa anticipates high inflation
February’s inflation index will be affected by numerous “price hikes, many of them unjustified,” Domestic Trade Secretary Augusto Costa said yesterday, anticipating high inflation in the second month of the new national price index that will be revealed on Monday
“Based on what we observe at the Trade Secretariat and on the trends we are detecting, February’s price index will be affected by price hikes, many of them unjustified, due to the devaluation of the last weeks of January,” Costa said. “In order to create uncertainties, price hikes were registered at the beginning of the month but were then reverted at the end of the month.”
Expectations are high on the inflation figure that will be reported by INDEC statistics bureau on Monday in order to know if the credibility of the agency will continue after January’s reported 3.7 percent inflation. It will be the first month with a fully operational price agreement programme since it started on January 7. The opposition-sponsored “Congress Index” reported this week a 4.3 percent inflation for February, anticipating a high number on Monday.
“On Monday we will announce the result of the February’s national price index, I don’t have the figure yet,” Costa said. “I am waiting for the figure in order to do the respective analysis.”
At the same time, Cabinet Chief Jorge Capitanich criticized the alternative price index released by consultancies and said those reports led to “price hikes”.
“The Buenos Aires City government released its price index as well as several consultancies. That leads to price hikes,” Capitanich said. “What’s true is that people’s purchasing-power has grown due to the wage negotiations and the economic recovery of the country. Having an economic plan has allowed us to achieve an economic recovery.”
The federal government unveiled in January a new national price index that reported 3.7 percent inflation compared to December. Increases across multiple sectors of the economy, including health care (5.9 percent), transport (5.4 percent) and home supplies (4.3 percent) were reported. Since January 2007, the government had systematically underestimated inflation and thus overestimated economic growth.
The new national price tracks prices on a basket of 520 goods and services, including food, drinks, clothing, housing, appliances, healthcare, transportation, communication, recreation and education. It’s a reference point for determining values for the basic food basket and total goods basket, which are used to measure poverty and destitution.
Herald with DyN