Bloomberg — Argentina’s annual inflation is expected to have surged past 70%, one of the fastest rates in the world, after renewed political turmoil fueled price spikes and a currency rout.
Consumer prices rose 71% in July from a year ago, according to the average of economists in a Bloomberg survey, signaling the fastest inflation in the country since 1992. On a monthly basis, the economists on average expect prices to have accelerated 7.3% compared to June, the worst monthly rate in two decades.
The official data will be released Thursday at 4 p.m. in Buenos Aires.
Argentina’s already-high levels of inflation got supercharged in July when then Economy Minister Martín Guzmán abruptly resigned, blowing open a political crisis long brewing inside the country’s ruling coalition. President Alberto Fernández replaced Guzmán with little-known economist Silvina Batakis, who lasted only three weeks in the job before Fernández tapped Sergio Massa, a seasoned political operator and one of the leaders of the Peronist coalition, for the role.
All the political turmoil added volatility to an already unstable outlook, with the black market peso losing about 15% of its value in the month and local businesses jacking up prices 20% overnight.
To signal a tougher stance on inflation, Massa committed to stop printing more money to finance government spending -- a key factor driving inflation -- for the rest of the year. However, other policies, such as removing subsidies on utility bills to improve the fiscal balance, stand to keep price increases high in the near term.
While there is no formal announcement scheduled, Argentina’s central bank is expected to increase its interest rate after the inflation data release. Two weeks ago the bank’s board, which meets every Thursday, delivered an outsized 800 basis-point hike, boosting its benchmark Leliq rate to 60%.
Economists see annual inflation in Argentina ending this year at 90%, according to the latest central bank survey.
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