BUENOS AIRES (Reuters) - Argentina’s stubbornly high inflation is expected to heat up again in March, according to a Reuters poll of analysts, creating pressure for the government as it looks to rein in rising prices that stymie economic growth and increase poverty.
The poll of 16 local and foreign analysts indicated that the South American country’s Consumer Price Index (CPI) would advance 4% in the month, quicker than the 3.6% rise a month earlier, driven mainly by food and education costs.
Argentina is expected to see 46% inflation this year, a recent central bank poll showed, well above government targets, though slightly lower than an earlier poll. Soaring prices were a key element in poverty hitting 42% last year.
Analysts are divided about whether a government drive to tamp down inflation will work. It is a key focus in talks with the International Monetary Fund (IMF) over a new deal to roll over some $45 billion in loans Argentina cannot pay back.
Hernán Hirsch of FyE Consult said inflation was “consolidating” even with currency controls holding the exchange rate in check.
Isaías Marini, an economist at Econviews consultancy, however, predicted the rise in prices would cool.
“In the coming months we project a slowdown in inflation, mainly due to the central bank’s new strategy of reducing the rate of exchange rate depreciation, but also due to controls and the freezing of rates,” he said.
Alberto Ramos at Goldman Sachs pointed out in a note that prices were rising around the region, driven by food and energy costs, and this would likely get worse before it got better.
“Rising inflation is no longer a risk but a tangible reality for a number of emerging markets, particularly in LatAm,” he said.
Argentina’s INDEC statistics agency is set to release official March CPI data on Thursday.
Graphic: Battling inflation
Reporting by Hernan Nessi; writing by Adam Jourdan; editing by Jonathan Oatis
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