Argentina Feb inflation highest in nearly 4 years

BUENOS AIRES, March 12 (Reuters) - 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."