Inflation to hit 0.9% in November

November inflation would reach to 0.9 per cent, due to food rise effect. "Final data are estimated again even one day before index disclosure (that's to say, today). It may decrease to 0.8 per cent due to statistical matters," official sources explained yesterday.

If November price rise is confirmed, inflation accumulated during the eleven months of the year would climb to 8.9 per cent and it would remain really close to official desire of reaching single-digit inflation for the entire 2006. To achieve that end, the index in December should not exceed 1-per cent level. This may not happen, since we are going through a period in which greater circulating cash amount (due to half bonus pay) and purchases for year-end celebrations tend to heat retail prices.

For that reason, government decided to postpone some increases, which had already been provided: one of the most clear cases is that of taxis, which should have risen 9 per cent at the end of November, with a strong impact this month. Increases for power and gas sectors were also postponed until the first two months of 2007 (when government had promised to do it, at the very latest, on December 15).

Greater impact

Undoubtedly, beef rise is one of the issues which affects final index the most, repeating a similar story to the one posted in November 2005. Steak price collapse as of April helped curbing inflation during several months. However, now we have the opposite effect. Meat sector is expected to show strong rises. For that reason, there's great official pressure to prevent wholesale sector increases from fully transferring to consumer.

"Food and beverage" area will show a rise ranging between 1.2 per cent and 1.4 per cent. Apart from beef, beverage and dairy products also had a number of increases. Argentine Domestic Trade Secretary, Guillermo Moreno, authorized several companies from the sector to adjust prices, since they managed to show cost increases. Of course that this situation will be reflected in basic basket leap, which stipulates how minimum poverty level moves.

Medicine

Although we will have to wait for data from the Argentine Statistics Bureau (INDEC), during the last month, all areas within measurement show increases.

Service charges, rents, school and health premiums, for example, have been showing monthly increases from the beginning of the year. The difference with respect to mid-2006 situation is food increase, which further boosts measurement.

There are also great expectations for construction, since cost has almost doubled inflation during the year.