“The correction of the relative prices of the economy puts pressure on family spending with a greater increase in the coming months in the services category. A family of four (two adults and two school-age children) is already beginning to feel the tax adjustment in your home management with the new tariff scheme, where electricity (removal of subsidies in 3 tranches of 20%) for which he pays $4,500 in September 2022, at the end of March 2023 he would end up paying $7,776; water (it is expected that in November there will be 45% of the subsidy, in January 2023 30% and in March 2023 15%), it would go from paying $800 to $3,900, the same would happen with Gas (increases in three sections, 20 %, 24% and 26%), with which the value goes from $3,500 in September to $5,468 in March 2023”.
The report also stipulates possible increases for him rent, car insurance, internet service, cable and streaming, based on the projections made in the REM. And other adjustments planned for the coming months, such as the taxis, expenses, prepaid or private school fees.
“The economic situation of Argentines for the coming months will be one of adjustment, because their income level will not be able to compensate for the cumulative increases in services that are coming. While the Government thinks that the equilibrium variable of private income is wages, the majority of Argentines are self-employed or informal who have no way of obtaining the services required to continue maintaining their socioeconomic level”, analyzed Damián Di Pace, director of FocusMarket.
“While in the first stage of the year core and seasonal inflation were ahead of regulated prices, Now this scenario is beginning to reverse and regulated prices will be ahead. Services will turn brown or even in many cases their prices will increase above the average level of the increase in the case of goods”, highlighted the analyst.
According to the account made by the firm, in September 2021 a family spent about $141,668 per month in this complete basket of services. A year later, that value rose to $178,928. And it is projected in March 2023, it would be $283,022. That is, 58% more than today.
what about food
Beyond the increases planned for services, food prices are also expected to continue to rise. “Food is going to be above average inflation in the coming months. But services are going to be above food and the general monthly inflation index for the coming months”, he explained to Ámbito Di Pace.
In this regard, from Ecolatina they pointed out: “Given the instability of the inflationary process, the weak macroeconomic scenario, an exchange scheme that could be modified and certain food prices that have lagged behind (such as the case of beef), the risks of a new food acceleration -growing above the General Level- are still latent”.
In fact, some surveys already warn that the item could grow above general inflation in September. For example, the Eco Go survey corresponding to the third week of the month registered a weekly variation of 1.7%. “With this data and considering a weekly variation projection of 1.4% for the last week of the month, the inflation of food consumed at home in September would climb to 7.3% monthly”, said the consultant, who expects a rise in the IPC in the order of 6.7%.
For its part, according to the LCG measurement, in the third week there was an increase of 2.8%. “As a result of this dynamic, so far this month an inflation of 6.7% has already accumulated, something similar to that observed during the month of August. Monthly inflation accelerated again, reaching 7.7% in the last four weeks,” the firm stressed in its report.
Source: Ambito
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