“I think that for reasons of inertia and/or unanchored inflation expectations, there was a re-marking of prices and wages that accelerated the nominal race,” said the Master in Economics, in dialogue with Ámbito. Lorenzo Sigaut Gravina.
On the contrary, the categories of Regulated prices and Seasonal prices exhibited decelerations and registered 3.9% and 5.4%, respectively.
Clothing once again led price increases
Among the divisions with the greatest weight in the Consumer Price Index (CPI) of the INDEC, the highest average increases stood out in Restaurants and hotels (it went from 5.4% to 7.3%) and Health (it rose from 5% to 6 ,4%)the latter driven by authorized prepaid uploads.
For its part, Clothing and footwear once again led the increases, with a jump of 9.9% (vs 10.9% in March). Specialists in the field explain that some of the reasons for the increases in this sector are: supply problems due to the lack of clothing workshops, the change of season and some restrictions on imports.
Food and drinks it was, once again, the division that had the greatest impact on the advance of the IPC. According to official data, in this item there was a significant 5.9% increasealthough lower than that of February and March.
The problems in the supply chain and the escalation in the price of commodities at a global level, which had already started with the pandemic and was aggravated by the war in Ukraine, added fuel to the fire to the inflationary dynamics in Argentina, which had already I was going through a worrying inertia.
Indeed, Among the foods that rose the most in Greater Buenos Aires were wheat flour (16.1%) and sunflower oil (13.5%), affected by the jump in the world value of grains.
A study conducted by economists Nicolás Bertholet, Gabriel Montes Rojas, and Fernando Toledo showed, for example, that a 10% rise in international food prices adds 0.5 points to inflation in the 40 countries analyzed in the study. , in line with IMF calculations. “The potential effect is not negligible in the face of a sudden acceleration in the prices of energy supplies or food, basic goods for the entire economy,” they highlighted.
At the same time, they clarified that “the sample examined is characterized by showing low inflation during the period analyzed, so the effects may differ in countries with high inflation rates (such as Argentina)”.
“During April the relevant international prices for Argentina did not move too much, but it is likely that the strong shock observed in these prices during March have also filtered into the CPI of the last month,” said Sigaut Gravina in this regard.
The market forecasts inflation of 65% by 2022
The latest Survey of Market Expectations (REM), prepared by the Central Bank (BCRA), showed that the private sector generally expected inflation of 5.6% for April. Likewise, the consultants and financial entities that participated in the REM raised their forecast for the accumulated of 2022, from 59.2% to 65.1%.
It is worth remembering that in March prices had climbed 6.7%, their highest monthly mark since 2002. With the April number already published, in the first quarter, an accumulated average increase of 23.1% was observed, the highest since 1991.
The Minister of Economy, Martin Guzmansaid in his last public statements that inflation “must be attacked firmly” and with a “consistent and credible economic program.”
In this sense, the official maintains that the macroeconomic policy of his portfolio must have a “comprehensive approach”, which includes “an external block, a fiscal block, a monetary block and a complementarity that are price and income policies.”
Martin Kalosdirector of the consulting firm EPyCA, told this outlet that the inflationary jump in recent months would not be so alarming “if it were an isolated event.”
“The problem is that it marks an acceleration of an inertia that is far from being corrected. We must find a credible policy that gives expectations a horizon. It is not about using an anchor or two, but about converging on a path of expectations of reducing inflation, which requires coordination of economic policies and articulation with the private sector, which is not happening today,” he said.
With a similar view, Sigaut Gravina was emphatic in pointing out that the Government is not in a position to use either the exchange anchor, the tariff rate or the fiscal/monetary anchor, and stressed the need for credibility and trust in the economic plan.
wage pressure
The acceleration in prices stopped the slight rise that wages had had in 2021. The INDEC showed this week that real wages fell about 1% in the first quarter.
Luis Campos, coordinator of the Social Law Observatory of the Autonomous CTAreflected that in the same period the Minimum salary, vital and movillost all that it had recovered last year, and returned to the lowest levels since 2004.
Faced with this situation, Guzmán affirmed that “it is obvious” that the increase in the minimum wage has to be brought forward, which traditionally takes place in the second half of the year. “We did the same with boosting income for the informal sectors, reacting immediately to what was the inflationary shock caused by the war in Ukraine,” he added.
In this line, the Government has already advanced for June the two quotas of increase in the minimum wage that were going to be given in July and August. From next month, the floor will be $45,540.
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.
