August 29, 2016 / 5:31 PM / 2 years ago

Argentine inflation expected at under 1 pct in August -minister

BUENOS AIRES, Aug 29 (Reuters) - Argentina’s inflation rate is expected to be less than 1 percent in August, Finance Minister Alfonso Prat-Gay said on Monday, forecasting that would continue the clear disinflation trend seen over the previous three months.

Inflation was 2.0 percent in July, down from 3.1 percent in June and 4.2 percent in May, when the official Indec statistics agency issued its first consumer price report since President Mauricio Macri took office in December.

Consumer prices stayed lower this month in part by an Aug. 18 Supreme Court decision that threw out a government-mandated increase in home heating gas prices.

“Even before that, August inflation was pointing toward a rate of less than 1 percent, the lowest monthly rate in 10 years,” Prat-Gay said in an interview broadcast on local radio.

“We are achieving what we set out to achieve, a lowering of inflation in the second half of the year,” the minister said.

The country has been hammered by stagflation, as wage increases have generally not kept up with fast-rising consumer prices. The malaise has sparked protests against Macri, a free-markets advocate who won office late last year on promises of increasing investment while tamping down inflation.

Gross domestic product is expected to shrink 1.3 percent in full-year 2016 before snapping back to 3.2 percent growth in 2017, according to a recent central bank poll of analysts.

Inflation was expected at 40.2 percent in 2016, one of the world’s highest rates, and 19.4 percent in 2017, according to the poll.

Reporting by Eliana Raszewski; Editing by Bernard Orr

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