Argentina Inflation Hits 79% Ahead of Likely Rate Hike

(Bloomberg) -- Argentine annual inflation surged to 78.5% in August, almost certainly cementing another central bank interest rate hike as early as this week.

That was faster than the 78.2% median estimate from analysts, and marks a new three-decade high, according to government data published Wednesday. Consumer prices rose 7% from a month earlier.

Clothing prices rose 109% from a year earlier, while food costs increased by 80%. Worse may be to come, since the government raised regulated utility prices in September, which will have a knock on effect in several sectors.

What Bloomberg Economics Says

“Monetary tightening won’t suffice to cool price gains in the near term. Energy subsidy cuts and pass-through from faster peso depreciation will push inflation near 90% by year-end.”