UPDATE 2-Argentina's newly revamped data agency says May inflation 4.2 pct
(Recasts first sentence, adds May inflation data breakdown, government policy context, deficit targets)
By Hugh Bronstein
BUENOS AIRES, June 15 (Reuters) - Argentine consumer prices boomed 4.2 percent higher in May, the government's newly revamped statistics agency said on Wednesday, outpacing market expectations and underscoring the need to tame the inflation ravaging Latin America's No. 3 economy.
The market had expected a 3.8 percent increase in consumer prices, according to a Reuters poll of analysts, which alone would have put Argentina on course for one of the world's highest yearly inflation rates.
It was the first official inflation reading since President Mauricio Macri took office in December. He shut down the publication of economic numbers while his team reorganized the government's Indec statistics agency after years of publishing data widely dismissed by the markets as inaccurate.
Prices of everything from heating fuel to bus fares shot higher after Macri reduced subsidies early in his term.
He lifted currency controls, which weakened the peso by about 30 percent and increased the price of imported goods.
Macri says his free-market policies will spur investment and pull the economy out of recession after eight years of heavy trade and currency controls imposed by previous leader Cristina Fernandez. But the results have been slow to arrive as families get squeezed between rising prices and weak job prospects.
Macri has reduced energy and transportation subsidies as part of his bid to cut the 5.8 percent fiscal deficit he inherited from Fernandez. Continuación...