ADVERTISEMENT

Inflation in Argentina Spiked After Shock Primary Election

Inflation in Argentina Spiked After Shock Primary Election

(Bloomberg) -- Prices in Argentina shot up last month after a shocking primary vote plunged the peso, reversing four months of declines.

Inflation hit 4% in August compared to July and 54.5% from a year ago, according to government data published Thursday. The monthly figure was below economists’ estimate of 4.4%, but marked the fastest pace since last March.

Inflation in Argentina Spiked After Shock Primary Election

President Mauricio Macri’s huge loss in the Aug. 11 primary to opposition candidate Alberto Fernandez sparked a massive selloff in Argentine assets. Investors fear Fernandez will undo Macri’s market-friendly stance and implement a populist economic agenda. The official vote is Oct. 27.

The peso fell 26% in August, forcing the government to delay debt payments and implement capital controls. Still, prices could rise even more in September because of a lag between the peso’s weakening and price adjustments, economists say. Analysts see September inflation at 5.8%, according to the central bank’s most recent monthly survey.

“September will be worse for inflation because the full pass-through to prices from the peso’s fall will be felt,” said Matias Carugati, an economist based in Buenos Aires. “The currency depreciation hit relatively late in August.”

To contact the reporter on this story: Patrick Gillespie in Buenos Aires at pgillespie29@bloomberg.net

To contact the editors responsible for this story: Juan Pablo Spinetto at jspinetto@bloomberg.net, Robert Jameson

©2019 Bloomberg L.P.