Along the same lines, Damián Di Pace, director of the consulting firm Focus Market, pointed out: “We see an inflation floor of 6% for the coming months, based on the correction of the relative prices of the economy (that is, increases in regulated prices, public utility rates), correction of the official wholesale exchange rate, restriction on imports, added to price indexation. Whereby, In fact, we see an inflation where some categories already present year-on-year increases of 100% and can continue to exceed that figure. And you can expect 100% inflation in December, unfortunately”.
In fact, the analyst noted: “I think Sergio Massa does not have a chance to avoid triple-digit inflation.”. “What can generate is not higher, trying to generate the right conditions for next year. What we observe is that the monetary issue continues to grow and has an inherited problem, which is the volume of Leliq, which implies that it will have a higher level of future inflation”, said Di Pace, who closed: “In conclusion, there are many reasons to say that inflation will effectively close at 100% in December and with the risk that, in case Massa’s plan does not work, it will become a ‘floor’ for next year”.
For its part, from the consulting firm LCG they projected for September an inflation of 6.5%“due to the increases in Food anticipated by the LCG Price Survey (+7.2% monthly in the first two weeks), to which is added increases in Taxis, Subway, Cigarettes, Expenses and Schools, and that are combined with high inflationary inertia.
“This does not contemplate the implementation of the new rate charts in September which, due to management problems, have not yet been applied. In this line, we estimate inflation for December around 100% annual”, they underlined from the signature.
Analysis
Aldo Abram, director of the Fundación Libertad y Progreso, assured that “Without a doubt, today increased the probability that we will end up with 100% inflation at the end of the year”. “And, if it is not by the end of the year, it will be in the first months of next year. It will even get over it. That is the perspective, ”she advanced.
“And that, fundamentally, is because the Central Bank has been issuing as in the middle of last year, when it began to hit the ‘little machine’ to put money in people’s pockets for the elections. But, after the elections, it did not loosen in that sense, ”explained the economist.
“So clearly, the peso continues to lose purchasing power. In other words, if the peso loses purchasing power, this ends up being reflected in forward prices. And that’s where there’s a confusion with the inertia issue: actually, what happens is that when the value of the peso falls, where it is first reflected is in the free exchange rates. But later, over time, it begins to be reflected in the other goods and services: in Argentina, it takes no less than three or four months for the depreciation of the currency to be reflected in the prices,” said Abram.
“But there is another factor, which is often confused with inertia, that is that people who get tired of the inflationary tax and start to stop demanding pesos: your hoarding goes down and, when the demand for something goes down, it also loses value. Sometimes it can happen that a Central Bank slows down the rate of issuance (this is not the case for now) and it is not immediately reflected in a slowdown in inflation”, he concluded.
A flat of 95%
the consultant Ecolatina estimates inflation of 6.5% for September. “For the rest of the year, the advancement of the scheduled increases in parity rates, a consolidated rate of devaluation at levels higher than in previous months, and the effects of the first and second round that the adjustments in rates will have (we estimate that in total they would affect 2 .8 pp from September to March) and fuels will be combined to keep inflation above 5.5% per month”, they pointed out from the firm.
In this sense, in one of their latest reports, they highlighted: “The vulnerability exposed by inflationary dynamics will require as a necessary (not sufficient) condition a path of reconstruction of the confidence and reputation of the economic leadership to begin coordinating inflation expectations towards the low. LThe speed with which the de-anchoring of expectations can be reversed will be decisive in order to avoid continuing to climb positions in the coming months”.
And, for that reason, he concluded: “With everything -even without mediating any shock forward- we estimate a slow moderation, leaving as a result inflation with a floor of 95% in 2022 and with no signs of a substantial slowdown in 2023”.
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.
