In the last week, the inflation data for January of the IPC San Luis, published by said province, and of the Wholesale Price System and the Cost of Construction, published by INDEC, were released. Consumer prices increased by 1.2% in San Luis. Wholesale inflation was 1.5% for the Wholesale Price Index (IPIM), 1.6% for the Basic Domestic Wholesale Price Index (IPIB), and 1.7% for the Producer Basic Price Index (IPP), in all three cases affected by increases in the price of fuels. The Construction Cost Index (ICC) increased by 2.4%, influenced by a wage readjustment agreed in October.
For its part, the estimates and high-frequency indicators from state and private sources monitored by the Central Bank of Argentina (BCRA) indicate that inflation in February will show an increase compared to the value recorded in recent months, mainly as a result of an increase in regulated prices, although for the moment without altering the monetary authority’s vision of disinflation.
Although the core inflation data of the IPC GBA was in January slightly below the path consistent with the annual target of 12-17% for the general level (see Monetary Policy Report, page 64), the prospects for February and the expectations of increase in regulated prices during the coming months warrant an attitude of caution.
As a result of all the available information, the BCRA decided to keep its monetary policy rate unchanged, the center of the 7-day pass corridor, at 24.75%.
The Central Bank will continue to maintain a clear anti-inflationary bias to ensure that the disinflation process continues towards its target of inflation between 12% and 17% during 2017.
