UPDATE 2-Argentina Feb inflation highest in nearly 4 years

* Analysts expected 1.3 pct, private surveys much higher

* February figures take 12-month inflation to 9.1 pct
(Adds analyst, details)

By Walter Brandimarte

BUENOS AIRES, March 12 (BestGrowthStock) – Soaring food prices
pushed Argentine inflation to a near four-year high of 1.2
percent in February, which could fuel demand for wage increases
and further hurt President Cristina Fernandez’s popularity.

The data released on Friday by the INDEC national
statistics agency compared with a rate of 1.0 percent in
January and took 12-month inflation to 9.1 percent.

The result was slightly below the median forecast of 1.3
percent in a Reuters poll of seven economists, and less than
half the 2.9 percent that private forecasters consider the
actual rate for the month.

Economists, the opposition and renegade INDEC employees
accuse the government of under-reporting official price data
for political reasons, as well as to save money on the
repayment of inflation-indexed bonds.

Food prices rose 2.6 percent last month followed by
clothing, up 0.9 percent, and health insurance, up 0.8 percent,
the government said. School costs rose 0.4 percent.

“Food price increases were generalized,” the Buenos Aires
City think-tank, headed by a former INDEC employee, said in a
report.

Surging food prices will have a heavy impact on the poor,
who make up most of Fernandez’s dwindling support base. Her
approval ratings are currently around 20 percent, according to
recent polls.

Rising inflation could also fuel demands for higher wage
increases. Worker unions have already been demanding pay rises
of up to 25 percent, putting pressure on private companies that
struggle to recover from the 2009 economic downturn.

Inflation is expected to rise to more than 20 percent this
year, according to private forecasters.

“It could get to 22 percent, 23 percent depending on what
happens this year,” said Fausto Spotorno, chief economist with
the Orlando J. Ferreres and Associates consultancy in Buenos
Aires.

Critics say the government, which rejects orthodox monetary
policy, has failed to tackle inflation with its preferred
method of price controls and export curbs.

“The government just hasn’t acknowledged this phenomenon
and the official figures aren’t getting any nearer to the
reality,” said former Deputy Economy Minister Jorge Todesca.

“Because they don’t acknowledge it, there’s no
anti-inflation policy.”

Stock Analysis
(Additional reporting by Juliana Castilla and Jorge Otaola;
Editing by Kenneth Barry)

UPDATE 2-Argentina Feb inflation highest in nearly 4 years