“After high records in the last two months, we expect the price index to slow down, although it will do so at the margin, being about 5.2%”, they explained from the firm LCG, and detailed: “This figure would be explained by some slowdown in the growth of Food and beverages after the initial shock from the war in Ukraine (5% monthly average), a category that would contribute 1.3 pp to the total CPI. In turn, there are specific increases of 11% in Fuels, 8% in Prepaid, 9.5% in Telephony, cable and internet, 15.5% in CNG, 9% for domestic employees, between 15% and 20 % increase in expenses and 8% increase for private schools in Buenos Aires”.
Among all these items, they stressed from the consultant, they would contribute another 1.7 additional points to May inflation. “The nominal value of the economy would take hold at a new floor higher than that of the fourth quarter of 2021assuming a year-on-year inflation floor above 75% in December”, they added.
In the same line, the IPC GBA of Ecolatina gave an increase of 5.2% last month. “In this way, it accumulated 28.1% in the first five months of the year and showed a year-on-year variation of 59.2% compared to the same month of 2021,” they remarked from the firm.
“Inside,he chapters with the greatest evolution were Medical care and health expenses (7.2%), Clothing (6.3%) and Education (5.8%). The Food and Beverage chapter grew 5.0%, reaching an interannual variation of 64.7%. It should be noted that this category had not been below the general level since September of last year. This slowdown is explained, at least in part, by the drop in fruit and vegetable prices (-0.9% and -1.3% respectively), which have a large seasonal component. In contrast, bakery products, meat, milk and non-alcoholic beverages were located above the evolution of the chapter”, they added from Ecolatina.
For its part, the consulting firm Orlando Ferreres estimated a general inflation of 4.7%but with a core inflation climbing 5.2%accumulating a rise of 57.7% year-on-year.
June: food on the rise
The analysts consulted in the REM estimated that June inflation will be 5% and that, throughout 2022, it will accumulate a variation of 72.6%. And the reality of the first days of this month shows that food continues to push upwards.
According to the survey carried out by LCG, in the first week of June food rose 2.8%, accelerating 1.9 pp compared to the previous week. “All the categories of the index had a positive impact on the total increase, standing out baked goods and meat with incidences above 0.5 pp”, they analyzed from the firm. The baked goods rose 3.9% in the week and meat, 1.7%.
“Food continues to rise at 5% average, compared to the same week in May. And I would say that with quite generalized increases: there is not a single thing that is going up, everything goes up. Many factors also begin to play, at the moment they adjust Care Prices, for example. But for now I don’t see a brake in the very short term”, said Camilo Tiscornia, director of C&T Asesores Economicos.
With this scenario, headline inflation is expected to exceed 5% again in June. It is that in the food category, they will add updates to gas rates (between 18.5% and 25%), and increases in prepaid (10%) and schools in PBA (8%).
“Inflation in June would be above 5% again, where the expected increase in utility rates will impact along with other regulated prices (such as prepaid), together with the wage driverwhich remains on after the joint negotiations”, they concluded from Ecolatina.
Source: Ambito
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