BUENOS AIRES, Aug 12 (Reuters) - Argentina's government reported July inflation of 0.6 percent on Wednesday, but the figure mostly failed to persuade economists that authorities are taking action to restore credibility to the data.
July's figure matched the 0.6 percent Reuters poll forecast of what the government would report, but was well below private estimates of July inflation of 0.9 percent to 1.2 percent.
As the first inflation number under new Economy Minister Amado Boudou, it was closely watched after two years of complaints that the consumer price data inflation has been underreported.
Clothing prices rose 1.0 percent during the month, while food and drinks costs increased 0.5 percent, the INDEC national statistics agency said in a statement. Transport and communications costs climbed 1.0 percent.
Boudou, who took office last month, has pledged to end the controversy over data prepared by the INDEC.
'This isn't window-dressing, it's a thorough job ... and we're going to improve INDEC's reputation,' Boudou told Radio Mitre.
Such comments helped Argentine debt prices rally in recent weeks, but financial markets are looking for evidence of change.
'For us, (July inflation) was 1.1 percent,' said Fausto Spotorno, chief economist at the Orlando Ferreres y Asociados consulting firm. 'I really doubt there's going to be a closing of the gap with real inflation.'
Economic analysts, opposition politicians and renegade state statistic workers accuse the government of meddling with consumer price data for more than two years in an effort to gain political capital and save money on debt repayments.
At least a third of Argentina's $146 billion sovereign debt is in inflation-indexed paper.
While July inflation data of 0.7 percent or 0.8 percent would have sent a signal that INDEC was making an effort to change, some market watchers saw signs of improvement in the 0.6 percent report.
They noted that the July number was higher than the June inflation report of 0.4 percent and the May report of 0.3 percent.
'They got only halfway there. It's not a clear normalization but it's not a provocative number either,' said Marina dal Poggetto, director of Bein y Asociados consulting firm.
Bond prices closed slightly higher after the inflation number was reported. Prices for government bonds traded over-the-counter in Buenos Aires rose 0.3 percent on average .
(Reporting by Karin Grazina and Helen Popper; Editing by Leslie Adler)
((helen.popper@thomsonreuters.com; +54 11 4318-0655; Reuters Messaging: helen.popper.reuters.com@reuters.net)) Keywords: ECONOMY ARGENTINA/INFLATION (For help: Click 'Contact Us' in your desk top, click here or call 1-800-738-8377 for Reuters Products and 1-888-463-3383 for Thomson products; For client training: training.americas@thomsonreuters.com ; +1 646-223-5546) COPYRIGHT Copyright Thomson Reuters 2009. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
July's figure matched the 0.6 percent Reuters poll forecast of what the government would report, but was well below private estimates of July inflation of 0.9 percent to 1.2 percent.
As the first inflation number under new Economy Minister Amado Boudou, it was closely watched after two years of complaints that the consumer price data inflation has been underreported.
Clothing prices rose 1.0 percent during the month, while food and drinks costs increased 0.5 percent, the INDEC national statistics agency said in a statement. Transport and communications costs climbed 1.0 percent.
Boudou, who took office last month, has pledged to end the controversy over data prepared by the INDEC.
'This isn't window-dressing, it's a thorough job ... and we're going to improve INDEC's reputation,' Boudou told Radio Mitre.
Such comments helped Argentine debt prices rally in recent weeks, but financial markets are looking for evidence of change.
'For us, (July inflation) was 1.1 percent,' said Fausto Spotorno, chief economist at the Orlando Ferreres y Asociados consulting firm. 'I really doubt there's going to be a closing of the gap with real inflation.'
Economic analysts, opposition politicians and renegade state statistic workers accuse the government of meddling with consumer price data for more than two years in an effort to gain political capital and save money on debt repayments.
At least a third of Argentina's $146 billion sovereign debt is in inflation-indexed paper.
While July inflation data of 0.7 percent or 0.8 percent would have sent a signal that INDEC was making an effort to change, some market watchers saw signs of improvement in the 0.6 percent report.
They noted that the July number was higher than the June inflation report of 0.4 percent and the May report of 0.3 percent.
'They got only halfway there. It's not a clear normalization but it's not a provocative number either,' said Marina dal Poggetto, director of Bein y Asociados consulting firm.
Bond prices closed slightly higher after the inflation number was reported. Prices for government bonds traded over-the-counter in Buenos Aires rose 0.3 percent on average .
(Reporting by Karin Grazina and Helen Popper; Editing by Leslie Adler)
((helen.popper@thomsonreuters.com; +54 11 4318-0655; Reuters Messaging: helen.popper.reuters.com@reuters.net)) Keywords: ECONOMY ARGENTINA/INFLATION (For help: Click 'Contact Us' in your desk top, click here or call 1-800-738-8377 for Reuters Products and 1-888-463-3383 for Thomson products; For client training: training.americas@thomsonreuters.com ; +1 646-223-5546) COPYRIGHT Copyright Thomson Reuters 2009. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.