UPDATE 1-Argentina inflation slows slightly in May

* May inflation at 0.7 pct vs 0.8 pct in April

* May reading matches forecast in Reuters poll
(Recasts, adds analyst quote, details)

BUENOS AIRES, June 11 (BestGrowthStock) – Argentine consumer price
inflation slowed slightly to 0.7 percent in May as food prices
eased, the government said on Friday, but analysts said the
real rate was nearly twice as high.

A Reuters poll of 16 market analysts gave a median
inflation forecast of 0.7 percent for the month, with estimates
ranging from 0.5 to 1.6 percent.

Analysts said the slowdown in inflation was caused by a dip
in food costs, particularly beef prices, which rose some 60
percent between November and March.

“Beef prices leveled off in April and finally came down
this month.” Marina Dal Poggetto, an analyst for the Miguel
Bein Consulting Group, said before the official numbers were
released.

Consumer prices rose 0.8 percent in April.

The inflation rate in the 12 months through May was 10.7
percent, the INDEC national statistics agency added, with
inflation in the first five months of the year at 5.1 percent.

Argentina’s consumer price data is widely discredited and
economists, the opposition, and former INDEC employees accuse
the government of under-reporting price rises for political
gain and to save money on repayment of inflation-linked bonds.

Food prices, which climbed 1.1 percent in April, rose 0.6
percent in May, the government said. Education costs rose 3.4
percent and clothing was up 1.1 percent.

President Cristina Fernandez has tried to slow inflation
using a mix of price controls and export curbs, shunning
orthodox monetary policy.

Government officials rarely refer to inflation in public,
instead call it “price readjustments.”

Inflation is a particular concern for Fernandez’s
government because it has a larger impact on the poor, who make
up her support base, and this could weaken her politically.

Public spending is surging at a rate of about 30 percent,
and analysts say the use of central bank reserves to service
debt is also stoking inflation.

Price rises have also eroded the advantage Argentina’s weak
peso has given local exporters.

Unions are demanding pay hikes of around 25 percent to make
up for what most say is a real annual inflation rate of at
least 20 percent.

Stock Market News
(Reporting by Kevin Gray; Writing by Luis Andres Henao;
Editing by James Dalgleish)

UPDATE 1-Argentina inflation slows slightly in May