“The data we have for the first fortnight put a floor of at least 6% on inflation in August”, summarized Camilo Tiscornia, director of C&T Economic Advisors, to Ámbito, adding that “food prices have been rising since the end of July, when they accelerated quite a bit”. “What we have detected is that baked goods increased strongly and, to a lesser extent, meat, which was a little calmer, was added.”
For its part, the IPC GBA of the consulting firm Ecolatina marked a monthly rise of 6.3% in the first half of August (compared to the same period in July), decelerating 1.6 pp compared to the same period last month. “For the full month we project 6.2% (74.6% year-on-year), for which it would accumulate 53.1% in the year”, the economist of the firm Santiago Manoukian pointed out in this regard.
“The data for August is impacted by the 40% increase in buses and trains in the AMBA, to which is added the round of price updates planned in prepaid (+11.3%) and expenses (+8% in average). All this, added to an inertia that seems difficult to dissipate in the short term and a greater exchange rate slide”, added the analyst.
Meanwhile, the survey carried out by the consulting firm Eco Go registered a variation of 1.5% in food prices in the second week of the month compared to the previous week. “With this data and considering a weekly variation projection of 1.4% for the next two weeks of the month, the inflation of food consumed at home in August would climb to 5.9% monthly”, they pointed out from the firm.
In this scenario, from Eco Go they projected that August inflation would stand at 6.5%. “Regulated products boosted the general indicator for the month with increases in prepaid (11.34%), schools in PBA (9%), train and bus fares in AMBA (40%) and expenses (between 6% and 10%) , among others”, they detailed.
Inflation: what to expect ahead
Meanwhile, as Eugenio Marí, Chief Economist of Libertad y Progreso, pointed out to this medium, until the second week In August, retail inflation measured by the Foundation “showed a growth rate for the prices of 5.2% in relation to the previous month. “With this baseline measurement, August would close with inflation around 6%. Although this represents a slowdown compared to July, it would be the third highest inflation record of the Fernández Administration. While the accumulated inflation of the year would climb to 55%”, added the economist.
“Also, Nor can we expect a sharp slowdown in inflation in the coming months, since no measures have been announced or implemented to make this happen.. So far there have been no major efforts to put the Treasury accounts in order, whose deficit is what has dragged the Central Bank to finance it with monetary issue. The segmentation of rates for this year would only provide fiscal savings of 0.06% of GDP, far from what is necessary to balance the macro,” Marí explained.
“While, on his side, The Central Bank has entered a difficult alley, with an artificially backward official exchange rate and levels of interest-bearing debt of $7 billion. In particular, the latter already generates its own issuance dynamics to pay interest on the debt for a BCRA with almost no assets of its own. In other words, the BCRA’s equity situation is already quite compromised; if it continues to assist the Treasury directly or indirectly, it will continue to lower the value of an Argentine peso that has already been hit quite a bit,” concluded the Libertad y Progreso economist.
Source: Ambito
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