BUENOS AIRES, June 13 (Reuters) - Argentine inflation unexpectedly eased in May for the fourth consecutive month but still clocked in at 13.5 percent since the start of the year, one of the highest rates in the world.
Consumer prices in Latin America’s No. 3 economy rose 1.4 percent in May, down from a 1.8 percent gain in the previous month, Economy Minister Axel Kicillof said on Friday.
The May reading came in below even the lowest forecast in a Reuters poll of nine analysts for a 1.5 percent rise in consumer prices. The median forecast was for a 1.9 percent gain.
“We saw a strong deceleration overall but it was the category of food and drinks that particularly interested us,” Kicillof told a news conference.
A sharp devaluation in January stoked inflation as Argentines, who often think in dollars because they lack faith in their own currency, raised prices to adjust to the new exchange rate. It also boosted the cost in pesos of imported goods.
Private economists say Argentina’s inflation rate may be more than 30 percent in 2014, compared with about 25 percent last year.
Argentina revamped its consumer price index this year in a bid to win back the trust of investors after years of blatantly underreporting inflation.
The government has implemented unconventional measures such as supermarket price caps in an attempt to control rampant inflation, while the central bank has hiked interest rates, tightening monetary policy.
Independent economists say the key issue is excessive deficit spending and that the government needs to cut back expenditure and keep wage hikes under control. (Reporting by Sarah Marsh and Nicolas Misculin; Editing by James Dalgleish)