Argentine: Inflation Jumps

Argentina’s annual inflation rate rose to 9.6 percent in the 12 months through July as increased government spending sparks a surge in consumer demand. The pickup in inflation has prompted the government to halt the sale of inflation-linked bonds, whose interest rates have surged along with consumer prices, and turn to the sale of dollar- denominated securities in a bid to keep down borrowing costs. The central bank said in a July 20 report that inflation would exceed the 5 percent to 8 percent range it had forecast in January for 2005.