By Hernan Nessi
BUENOS AIRES (Reuters) – Argentina’s monthly inflation rate likely edged down to 12% in March, analysts polled by Reuters estimated, which would mark a third straight month of deceleration for prices and a boost for new libertarian President Javier Milei’s economic reform drive.
The South American country has the world’s highest inflation with the annualized rate running over 275%, which hurts consumer spending power and dampens the economy. Milei has made curbing prices a focus via an austerity package of cuts.
In a poll of 25 analysts surveyed by Reuters, the median prediction was 12% for the month, down from 13.2% in February and a peak of over 25% in December, when Milei devalued the peso currency sharply after taking office.
Analysts said the slower rise in prices was due to a drop in consumption, particularly of food and beverages, as well as the government’s decision to postpone planned price increases for public services.
“One or two months ago it was expected (March inflation) would be around 16% both for seasonal reasons and for the price dynamics observed since December,” said Juan Miguel Massot, an economic scientist at the local Universidad del Salvador.
“However, the forecasts were recalculated due to the impact of the dramatic drop in consumption.”
Milei’s austerity measures and spending cuts have helped turn around a deep fiscal deficit, boosting market confidence, but has come at the cost of a slide in economic activity, consumption and production. Poverty levels are also rising.
The projections for March monthly inflation ranged from 9.9% to 13.1%. The government has previously indicated the price rise for the month would be close to 10%.
“The delay in the exchange rate devaluation and increases in utility prices likely slowed monthly inflation in March,” said consulting firm Oxford Economics in a report, where it predicted a 13% monthly rise in the consumer price index (CPI).
“Last month, we expected a 14% month-on-month increase in the CPI in March, but increases in transportation and gas prices were delayed until April.”
Argentina’s official INDEC statistics agency is scheduled to publish March inflation data on Friday.
(Reporting by Hernan Nessi; Editing by Adam Jourdan and Chris Reese)