“May inflation would not pierce 5%”, pointed out the economist Jorge Neyro, who in this context analyzed: “In December we could have an inflation close to 75%, due to the high inertia and by the need to keep competitive both the exchange rate like interest rates. And all of this collaborates, in some way, so that inflation remains high”.
Beyond some specific rises, such as that of fuels (which has both a direct and indirect impact), the increase in the food basket and beverages pushes up the overall CPI. In fact, according to the survey carried out by the consulting firm LCG, this item grew an average of 5.2% during May.
“In the fourth week of the month, the rate of food and beverages marked a weekly increase of 0.8%, keeping constant with respect to the previous week. the category meats alone explained two-thirds of weekly inflation. The drop in the percentage of products with increases within the total basket stands out: 13%, 11 pp below the value of the previous week. It is the lowest value observed since the last week of March”, highlighted the firm, which in any case clarified: “With four consecutive weeks, food prices averaged 5.2% in May compared to the same weeks in April.
In this scenario, LCG estimates that general inflation for May would be around 5.5%presenting an interannual rise that would exceed 61%.
Along the same lines, from EcoGo, they projected an inflation in the yearsfood consumed at home 5.5%, based on the surveys carried out by the consultant. “The inflation figure for May would stand at 5.3%, 0.1 pp above what was expected last week. The increase responds to a more comprehensive survey of the different chapters that make up the Survey of Retail Prices, where the projected increases in categories such as housing, health and education, driven by increases in prepaid (8%), schools in PBA (8%), fuel (7.4% on average), domestic service (12%), cigarettes (12%) and expenses (around 12%)among others,” the firm said in a document published last week.
Outlook for June
The trend, in principle, would continue during June. “A priori, June inflation would manage to be below 6%, although still above 5%: the projected increases in utility rates (electricity, gas and water), to which are added programmed increases in prepaid (10%), and rentalsamong others, will continue to maintain high inflation with greater inertia influenced by greater indexation of the dollarsignificant increases in parities in the short term and the lack of a robust anchor that allows anchor expectations”, he analyzed Ambit Ecolatina economist Santiago Manoukian.
At the end of last week, the Secretary of Energy enabled the increases in public service rates that will take effect from next month: in the gas, the increases will be between 18.5% and 25%; while for the electricity the update will be 16%.
In addition, according to the evolution of the rental contract index, published by the Central Bank, the increase in June for those who signed a rental contract rental in May 2021 it will reach almost 54%.
On the side of the prepaidmedical companies are planning increases of up to 10% for June and 4%, for July. In the first months of the year, prepaid increased by 22.5%.
Source: Ambito
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