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By Luc Cohen
BUENOS AIRES, Oct 13 (Reuters) - The inflation rate was 1.1 percent in greater Buenos Aires in September, Argentina’s official Indec statistics agency said on Thursday, a jump from the prior month but still lower than levels earlier in the year.
The September figure was largely in line with market expectations as a Reuters poll showed a median estimate of 1 percent inflation for the month. Consumer prices in Latin America’s No. 3 economy rose 0.2 percent in August, according to official data for the Buenos Aires metropolitan area.
Indec does not publish countrywide inflation data, but consumer prices for the greater Buenos Aires area are used as a proxy. It said it opted to publish the data only from Buenos Aires and surrounding areas in June, when it resumed publishing inflation figures, in order to save time.
President Mauricio Macri closed and revamped the agency after taking office last year amid concerns the previous administration had manipulated data. Indec is working to re-establish a national inflation measure, starting with food and beverages.
Monthly inflation in earlier months this year was considerably higher, at 2 percent in July, 3.1 percent in June and 4.2 percent in May. Inflation for full-year 2016 is expected to come in at 39.6 percent, according to a central bank poll of analysts, which also showed a median forecast of 20 percent inflation for 2017.
A recession is helping to keep a lid on consumer price growth. Also contributing to the low August and September inflation readings was a court ruling that forced the government to restore home-heating natural gas subsidies until public hearings could be held.
After the hearings were held, the subsidy cuts were reinstated last week and the government announced that prices will increase between 300 percent and 400 percent for home-heating gas. The subsidy cut is a major part of Macri’s deficit reduction program.
Had consumers been paying higher gas prices, inflation would have been 1.7 percent, said Andres Borenstein, an economist with BTG Pactual in Argentina, which is “not terrible” for the inflation-stricken country given the central bank’s target for 1.5 percent monthly inflation in the fourth quarter.
“It’s not a great number in the sense that 1.7 is higher than last month, but it’s not a disaster either,” he said.
While higher gas prices in October mean inflation will likely grow, “second-round effects” will be limited since businesses have already factored in the rate hikes into the prices of their goods, Borenstein said. (Reporting by Luc Cohen; Editing by Leslie Adler and Alan Crosby)