Good inflation news for Argentina in September

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Thursday, October 13, 2016

Inflation in the Greater Buenos Aires area (CPI GBA) of Argentina reached 1.1% during September compared to 0.2% in August and 2.0% in July, according to data from national statistics bureau Indec.

Despite the increase compared with August, the result came in below analysts' projections of a 1.3% hike in prices, according to the central bank's monthly expectations survey REM .

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Food and apparel prices had the largest impact on monthly inflation, with increases of 2.3% and 4.9% respectively.

On the other hand, prices of household and basic services dipped 5.3% in September.

The inflation results for August and September also reflect reductions in residential gas rates ordered by Argentina's supreme court, which were in effect for 14 days in August and 17 days in September, according to Indec.

In August residential gas rates fell 35.6% compared to the previous month, while in September the reduction was 48.5%.

Core inflation, which excludes goods with regulated prices and those with costs that vary seasonally, increased 1.5% in September.

Analysts consulted in September's REM projected that inflation would reach 2.0% in October, as the effect of the reduced gas rates disappears.

Earlier this week Argentina's central bank kept its benchmark rate unchanged for the third consecutive week at 26.75% based on concerns of inflation expectations above the target range.