(Adds reasons for deceleration, economist comment)
By Sarah Marsh
BUENOS AIRES, June 15 (Reuters) - Argentina said on Monday that annual inflation eased to 15.3 percent in May, although private economists put it much higher and suggest it could speed up later this year due to a splurge in public spending ahead of October’s elections.
The Economy Ministry said consumer prices had risen 1.0 percent in May on the month, down from 1.1 percent in April and 1.3 percent in March. That took total inflation so far this year to 5.7 percent, it said.
But most private analysts question the credibility of government data in Latin America’s third-largest economy. The International Monetary Fund warned earlier this month that Argentina had not taken sufficient steps to bring its statistics in line with global standards.
A separate poll published by Argentina’s Congress and compiled from private estimates put inflation in May at 2.02 percent on the month and 28.76 percent on the year, about twice as much as the government data.
Buenos Aires City had similar figures of 2.2 percent on the month and 26.7 percent on the year.
Many economists say the government has managed to cool inflation this year slightly from last year’s rates of nearly 40 percent by keeping the local currency stable at the cost of competitiveness and foreign reserves, and by delaying necessary utility tariff adjustments.
But they say Argentina will simply have to correct its exchange rate and utility tariffs further down the line.
Moreover, delaying such corrections may not be enough to keep a lid on inflation if the government continues to crank up spending ahead of the presidential election in October. Primary spending rose 44.1 percent on the year in March, according to data released last month.
“The current unsustainable policy mix is very likely to have some lasting and lagged effects on inflation that will probably materialize with significant vigor at the beginning of the next administration,” said Mauro Roca, senior economist at Goldman Sachs in New York.
Because of the pace of public spending, Roca said, Goldman raised its inflation forecast to 35.7 percent for 2016. It had previously forecast an annual rate of 32.5 percent. (Reporting by Sarah Marsh; Editing by Lisa Von Ahn)