In this regard, according to a report by the consulting firm Focus Market, April inflation “slowed down with a very high floor, above 5.5%.” “The heading ‘Food and drinks‘ it is located in 5.9%. During that month, above the average price variation were ‘Expenses’, with increases of 20%, Prepaid 6%, Domestic Service 12% and Schools 9%. In other words, there were increases in Services that will lead to an increase in education, housing and health,” explained Damián Di Pace, director of the firm.
“The data of April inflation would stand at 5.7%largely explained by the strong drag left by March and the increase in expenses (around 20%), schools (9%) and garages (25%) in CABA, prepaid (6%) and domestic service (12%). )”, agreed an analysis by the consulting firm EcoGo, which detailed: “The rise would be driven mainly by inflation corewhich would reach 7%, while regulated and seasonal prices would be considerably lower with positive variations of 3.7% and 2.9% respectively”.
Meanwhile, from the Analytica consultancy they estimate a inflation of the 5.8%with food climbing a 6.3%.
“Inflation for April is estimated at around 6% and going forward, I think there is a new floor for monthly inflation, which for now is 5%”, Víctor Beker, director of the Center for the Study of the New Economy of the University of Belgrano, explained to Ámbito, who in relation to the measures adopted by the Government, pointed out that “particularly in terms of trying to moderate the increases in the food, have little impact on the general indices”.
food pressure
Precisely, food put pressure on the general index in some way. For example, according to the survey carried out by Eco Go, the item “registered a variation of 0.5% compared to the previous week.” “This implies a slowdown of 0.4 pp in the margin. With this data and considering a variation for the fifth week of the month of 0.9%, the inflation of food consumed at home in April would climb to 6.3% monthly”, they pointed out from the firm.
Meanwhile, when analyzing the variations within the basket, Di Pace pointed out: “In the Food category we have price variations again of two digits into basic categories. During April, fresh products rose more, which had not had as much rise in March. For example, chicken climbed 14%; beef, 12% and milk, 10.9%. For its part, we have to take into account that although the devaluation of the peso in the official exchange rate accelerates below inflation, it does not stop impacting wholesale prices at a time when reserves to import inputs are scarce. basic for production in our country”.
what’s coming
Facing the next months, a certain deceleration in the inflation rates can be expected, although it would remain at high levels. “We see a deceleration forward, for the rest of the year, but with a monthly average that it will not be less than 4%. We are going to see part of this slowdown in April, with data that will be less than in March. Because in March there were several factors that pushed it up, mainly the shock in international prices due to the war between Russia and Ukraine. And that effect is going to be diluted in the coming months,” Claudio Caprarulo, director of Analytica, told Ámbito.
In any case, the economist clarified: “That does not mean that going forward there will be no uncertainty with respect to other variables: on the one hand, on how the update of rates of energy, which will end up authorizing the Government and that will hit in a month in an increase in inflation. At the same time, we saw that despite the fact that the Central Bank has been increasing the interest rate devaluation month to month, that didn’t work for me to accumulate Dollars in the first months of the year. There is still an inconsistency in the exchange result that we have to see how it is resolved: if it decides to do it with a higher level of devaluation, which also puts a higher floor on inflation; if you do it with greater control of the imports, despite the fact that in the commitment of the agreement with the IMF it is foreseen that the import controls will be gradually disarmed; or if the interest rate is going to increase further. It is still not clear how the inconsistency that exists today on the front will end up being resolved. exchange and how it is resolved will also be determinant for its impact on inflation in the coming months”.
“In this scenario, it should also be noted that in the next three months the Government should have a better result of the trade balance (especially in May), because they are the months in which historically the most is liquidated by the agro. So, perhaps the intensity with which you use these tools can be decreased or increased depending on what happens in this period with the trade balance,” Caprarulo remarked.
“Inflation for the month of may it will have rises that do not allow it to lower its pressure on prices. price increases CNG, utility rates, cell phone, cable, internet and relative price adjustments of the economy that still have to be accommodated, they put a high floor on prices for the coming months,” Di Pace remarked in this regard, adding: “From the monetary and fiscal point of view, Martín Guzmán is being balanced and What we see today is the imbalance generated for the 2021 legislative campaigns. Going forward, the placement of debt in the market versus monetary issue will be the fundamental point to evaluate in order to see a real slowdown in inflation towards the second half of the year.”
Source: Ambito
David William is a talented author who has made a name for himself in the world of writing. He is a professional author who writes on a wide range of topics, from general interest to opinion news. David is currently working as a writer at 24 hours worlds where he brings his unique perspective and in-depth research to his articles, making them both informative and engaging.
