Argentina with a record 6.5% inflation in September, and 40.5% in 12 months

October 18, 2018 Web Desk

BUENOS AIRES – Argentina says that consumer prices rose 6.5% in September bringing the twelve months inflation rate to 40.5%, one of the world’s highest.

The inflation rate published by the official statistics agency Indec, on Wednesday follows a sharp devaluation of Argentina’s currency. The nine-month rate reached 32.4%.

The peso has depreciated more than half this year. That led the government to seek a large financing deal with the International Monetary Fund. Economic analysts estimate that consumer prices could rise nearly 45% this year and forecast that the economy will go into a deeper recession.

The Argentine Central Bank’s own REM (Market expectation survey) had predicted a rise of 5.9%, with inflation seen closing the year at around 44%. Core inflation, which discounts regulated and seasonally priced items, stood at 7.6%, the highest tally since Indec resumed measuring inflation on a monthly basis in 2016.

The top price increases in September were in transportation, which rose 10.4% and shoes and clothing, up 9.8%. Increases to utility rates that are part of a series of austerity measures have also fueled inflation. Food prices climbed 7%.

Meanwhile, U.S. central bankers in Washington expressed fears about instability in emerging economies, such as Argentina. Some U.S. Federal Reserve members warned that instability in emerging economies – many of which are heavily indebted and vulnerable when U.S. rates rise – could “spread more broadly through the global economy and financial markets,” publicized minutes of Fed meetings revealed.

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Markets fear currency crises in Turkey and Argentina and other emerging market economies could spread beyond their borders – something that could be sparked as investors pull out to take advantage of higher rates in the United States.–MercoPress

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