After the resignation of Martin Guzman, exchange rate volatility and restrictions on imports were the ideal scenario for the re-marking of prices that already came with a high inertia. For LCGAccording to the Food Price Survey, inflation climbed to an average of 7.4% in July, with weeks in which some foodstuffs reflected increases of 30%. To this were added agreed increases in regulated services such as trains (10%), private schools (8%) and prepaid (4%) that together contributed 1.1 inflation point.
From the Foundation freedom and progress forecast a rise in the CPI of 8%, “recording the largest monthly rise since April 2002.” The items that contributed the most to the month’s increase were “Food and non-alcoholic beverages” (12.7%), “Home maintenance” (21.2%) and “Education” (21.5%).
Eugenio Marí, Chief Economist of Libertad y Progreso, explained in this regard: “The fall in the demand for money that occurred in July accelerated the rise in prices. But we must not lose sight of the fact that the fundamental cause is the fiscal-monetary imbalances that the Government has been sustaining. In a simple way, financing more and more fiscal deficit with monetary emission is not free and has limits”.
Meanwhile, the survey of retail prices of S&T for the GBAshowed a monthly increase of 7.6%also considered by the consultant as “the highest since April 2002, immediately after the exit of the Convertibility”. “It even exceeded the 7.2% that we had surveyed in April 2016, when the Macri administration implemented strong adjustments in public services, although that data is not in the official series because the CPI estimate had not yet been restarted” , they explained from the firm.
“As always happens in July, Leisure was the item with the greatest increase due to the seasonal peak in tourism for the winter holidays. The movement was boosted by the surge in alternative exchange rates during the month, something that was also reflected in other items and in electronic products, which do form part of this item”, they pointed out from C&T, and remarked that they also had a strong rise Education, Clothing and Food and beverages, which climbed 5%.
For its part, the IPC GBA of Ecolatina advanced 7.5%, with some categories “marking double-digit monthly variations”. The IPC GBA of Orlando Ferreres, meanwhile, presented an acceleration of 6.9%. “Regarding the main items, Education and Home Furnishing led the month’s increases, registering a monthly increase of 12.8% and 11.3%, respectively, followed by Health, which presented a variation of 8.7%” , they explained from the firm.
“We estimate a level of inflation for July 6.8%which is one and a half points higher than that of June”, Claudio Caprarulo, director of the consulting firm, told Ámbito Analytics. In the same line, from Echo Go estimated that July inflation was 6.8%.
Facing what may happen in the coming months, Caprarulo pointed out: “Moving forward, the next five months (between August and December), we forecast an average monthly inflation level of over 5%. 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.”
What happened in the first week of August
As reported by the consulting firm LCG, the first week of August closed with a 2.1% increase in the price level of food and beverages, accelerating 1.1pp from the previous week. “Although the first weeks of each month usually show the highest records, a discreet jump in weekly inflation is observed.” The percentage of products with increases remained around 25%, marking five consecutive weeks above 20%.
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.
