Argentina inflation cools for third straight month in June

BUENOS AIRES (Reuters) - Argentina consumer prices rose 2.7% in June, the country’s statistics agency said on Tuesday, slowing for a third straight month as the government looks to rein in stubborn inflation that has dogged Latin America’s No. 3 economy.

Rolling 12-month inflation was running at 55.8% in June, edging down for the first time this year from the 57.3% recorded a month earlier, while year-to-date inflation was 22.4%, the National Institute of Statistics and Censuses (INDEC) said.

The slower rise will be welcome news for Argentine President Mauricio Macri, who has been struggling to stabilize the country’s battered economy through unpopular austerity measures as he seeks re-election in October.

“Inflation is still too high, but it’s going down,” Argentine central bank chief Guido Sandleris told reporters after the data was released.

“We’ve now had three consecutive months where we’ve seen inflation slow, and we believe this will continue to happen in the coming months... Inflation will continue to fall in July,” he said.

The June inflation data is one of several recent economic indicators, including a stronger peso and slowly falling interest rates, that paint a slightly rosier picture of Macri’s chances of staying in office.

Goldman Sachs analyst Alberto Ramos said in a note that while inflation was still elevated, the investment bank expected it to moderate further in the second half of the year given recent currency stability and measures to control price rises.

But he said uncertainties remained, especially with the upcoming presidential elections, and said 12-month inflation would likely be “a still extraordinarily high” 38.4% by the end of 2019.

Argentina is still digging itself out of a biting recession, after 2018 saw inflation rise 47.6%, part of the broader financial turmoil that has left a third of the country’s population in poverty, pushed interest rates skyward and sent the peso tumbling against the dollar.

(GRAPHIC - Argentina's rising prices png:

Reporting by Jorge Iorio and Marina Lammertyn; writing by Cassandra Garrison and Adam Jourdan; Editing by Leslie Adler and Jonathan Oatis