(Bloomberg) -- Prices in Argentina shot up last month after a shocking primary vote plunged the peso, reversing four months of declines.
Inflation hit 4% in August compared to July and 54.5% from a year ago, according to government data published Thursday. The monthly figure was below economists’ estimate of 4.4%, but marked the fastest pace since last March.
President Mauricio Macri’s huge loss in the Aug. 11 primary to opposition candidate Alberto Fernandez sparked a massive selloff in Argentine assets. Investors fear Fernandez will undo Macri’s market-friendly stance and implement a populist economic agenda. The official vote is Oct. 27.
The peso fell 26% in August, forcing the government to delay debt payments and implement capital controls. Still, prices could rise even more in September because of a lag between the peso’s weakening and price adjustments, economists say. Analysts see September inflation at 5.8%, according to the central bank’s most recent monthly survey.
“September will be worse for inflation because the full pass-through to prices from the peso’s fall will be felt,” said Matias Carugati, an economist based in Buenos Aires. “The currency depreciation hit relatively late in August.”
