In the government they are not very friends with making forecasts month by month, but in the Casa Rosada it is perceived Enthusiasm for the deceleration that has been registering inflation -private projects anticipate that the June index would be below 2% –. In La Libertad Avanza it is pointed out that in this way The recovery of wages will continue and, therefore, the ruling will ensure a good result in the October elections.
The last survey of market expectations (which includes the consensus of economists) provides that the June index be 1.9% (something above 1.5% recorded in May). However, some consultants have a minor estimate.
With data from the first fortnight, Ecolatina calculates that inflation will be 1.8% this month. As happened in May, he plays in favor of moderation in the increases in food that, according to this consultant, have been advancing at a rate of 1.3% monthly.
Analytical numbers are coincident in terms of lower inflation in food and drinks. For this consultant, in Greater Buenos Aires this item rose only 0.1% in the second week of June and accumulates 1.5% in the last four weeks.
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In that same period, the lower adjustments were recorded in fruits, with an increase of 0.3%, while vegetables had a deflation of 1.6%. Particularly, popular consumption products such as potatoes or onion record falls in their prices.
Consequently, Analytica provides that the general price level will have a 1.7% increase in the current month. For his part, economist Camilo Tiscornia specified Scope That the first week the rise was 2% basically because in this period the increases weigh and, in the second already records a 0.5% drop.
Wages
For the Government, the decrease in inflation is key in the face of mid -term elections. The wages had a loss in March when inflation rebounded to 3.7% and salaries increased only 1.9%, as results from the average of joint agreements surveyed by Synopsis.
In April, prices and salary adjustments were head to head, with increases of 2.8 and 2.7%, respectively, but in May a certain recovery was observed in purchasing power since the adjustments averaged 2.4% against a rise of 1.5% in the price index.
If inflation is below 2% and wages continue to adjust something above this step, the government would continue to continue income, after the strong setback experienced at the beginning of last year.
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In consultants it is commented that to ensure the fall in inflation, Starfs should not occur in the value of the dollar, which is taken as a reference for pricing.
While the government insists that the exchange rate is now set by free flotation, interventions from the authorities were recorded in the futures market that aimed to contain the value of the currency.
The Ministry of Economy and the Central Bank continue to deploy a contractive monetary policy that tends to avoid landslides of the currency. At the same time, the BCRA does not intervene by buying currencies of the commercial surplus, but the authorities are accumulating reservations in the hands of the monetary authority through indebted operations.
Ultimately, the bet seems to go through a stable dollar combination, inflation in low and progressive salary recovery that would allow the ruling party to increase its electoral chances.
Source: Ambito
