Thus, July would become the month with the highest inflation of the year (exceeding 6.7% in March) and it is also expected to continue at high levels until December. “We estimate an inflation level for July of 6.8%, which is one and a half points higher than that of June. Looking forward, the next five months (between August and December), we foresee an average monthly inflation level above 5%”, Claudio Caprarulo, director of the Analytica consultancy, told Ámbito.
This scenario, without a doubt, poses a challenge for the Government. “On the one hand, because there are no conditions to foresee a reduction in sustained inflation. Beyond the fact that it slows down with respect to the peak it is having in July, it remains to be seen if there will not be another peak, depending on how the government’s exchange problem is resolved. If it finally ends up validating a devaluation jump, or it doesn’t”, explained Caprarulo.
“This also puts a very big challenge on how the Government is going to do to contain the social situationbecause this acceleration is going to generate a negative impact on the most vulnerable sectors, which are those, for example, that are working in the informal sector and are the hardest hit since 2018,” said the Analytica economist, who determined that it will also be key for the coming months to see what finally happens with energy rates.
projections
According to Camilo Tiscornia, director of C&T Economic Advisors, July inflation will be between 7% and 8%. And, in addition to the economic situation, it added a seasonal factor that also contributed to the acceleration of prices: the item “sightseeing”. From the Fundación Libertad y Progreso, meanwhile, registered an increase of 7.8% in the prices surveyed during the first three weeks of the month.
For its part, according to EcoGo, the inflation figure for July would stand at 6.5%, an estimate that is 0.3 pp higher than expected last week. Acceleration responds to the impact of the new exchange rate run that translated into widespread price increases -highlighting categories such as technology, appliances, clothing and art. disposable- and the brake on the sales of some products, in the face of the uncertainty of the replacement cost”, they pointed out from the firm in their survey of retail prices, and added that this is also added to the increases in regulated products and services such as water rates (20%), schools in CABA (15%), prepaid (4%) and cigarettes (12%), among others.
Meanwhile, from LCG they forecast that July inflation will be above 7%. “For December, we place it at around 90% annual. But this value supposes a deceleration of the registrations to 5% monthly average since August, something that seems difficult if there are changes in relative prices such as the dollar, rates or wages, “they added.
the category foodsthe one with the greatest incidence on the CPI, returns to grow strong in July. This follows from the different surveys carried out by the consultants. For example, the basket that measures Eco Go presented a variation of 1.2% in the third week with respect to the previous week. “With this data and considering a weekly variation projection of 1.2% for the remaining week of the month, the inflation of food consumed at home in July would rise to 5.9% monthly”.
For its part, from LCG they pointed out that “during the third week of July, the Food Price Survey was again located, for the second week in the month, above 2% weekly (2.11%)”. “With this dynamic, food accumulates an increase of 6.2% in three weeks, which monthly gives 8.6%. It is noteworthy that for the third consecutive week the percentage of products with increases remained above 30%. This reflects a marked acceleration of inertia with a shortening of the redial times, which is equivalent to assuming that all the prices surveyed are corrected upwards every three weeks”, the firm stressed.
Source: Ambito
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