(Adds economic, government policy context)
BUENOS AIRES, Sept 13 (Reuters) - The inflation rate was 0.2 percent in greater Buenos Aires in August, the official Indec statistics agency said on Tuesday, showing a steep decline over the previous three months.
Consumer prices in Latin America’s No. 3 economy rose 2.0 percent in July, according to official data for the city, down from 3.1 percent in June and 4.2 percent in May.
Analysts in a central bank poll expect inflation of 41 percent this year and 19.8 percent in 2017. They see gross domestic product shrinking 1.5 percent this year before rebounding to 3.2 percent growth in 2017.
A recession is helping to keep a lid on consumer prices. Also contributing to the low August inflation reading was a court ruling that forced the government to restore home heating gas subsidies until public hearings could be held.
The subsidy cut is a major part of President Mauricio Macri’s deficit reduction program.
Home heating bills shot higher earlier this year when Macri removed the subsidies. They fell when the Supreme Court restored the subsidies last month. (Reporting by Hugh Bronstein; Editing by Chris Reese and Jeffrey Benkoe)