BUENOS AIRES (Reuters) – Argentina’s inflation is expected to hit 7.1% in March, according to a Reuters poll of analysts. Monthly highs, putting pressure on the government as it looks to rein in spiraling prices that are pushing up poverty levels.
The South American country is battling annual inflation of above 32%, one of the highest levels in the world, sapping profitability and exacerbating the cost of living crisis, hurting the ruling Peronist coalition ahead of elections in October.
The median forecast comes from 12 analysts polled by Reuters, who estimate monthly gains ranging from 6.4% to as high as 7.4%.
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High inflation, which is expected to be slightly below its peak in July last year, is likely to persist as the government tries to stimulate grain sales by offering preferential exchange rates to soybean exporters and other producers, analysts said.
“For the second half of the year, we expect inflation to accelerate due to higher issuance related to ‘agricultural dollars’ (exchange rates) and election uncertainty,” said Isaias Marini, an economist at consultancy firm Econviews.
“We see annual (CPI) at % with upside risks.”
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The increase in March was driven by regulated prices and seasonal price increases, with education costs and clothing costs climbing due to seasonal changes. Marini said the increase in food was slightly below the headline inflation rate. .5%, the highest in recent 12 years. Official data for March is expected to be released on Friday.
April’s price growth also looks to have turned higher again, said Horacio Larghi, an economist at consulting firm Invenomica.
“The first day of April suggests inflation is unlikely to fall below 6% this month,” he said.
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