As can be seen from the study, the “Bakery products, cereals and pasta” were the ones that increased the most in the first week (7.4%), followed by “dairy products and eggs” (5.9%) and “vegetables” (4.6%); while “fruits” climbed 3%. On the contrary, the “meats” presented a contraction of 0.2%which contributed to the increase in the basket not being even greater.
With this upload, food is poised to run above the general price level again during October. According to private surveys, this item grew more than 7% in September, when the CPI will have done so in the order of 6.7%.
These increases hit squarely in the baskets that measure poverty and indigence. “The data reflected by the INDEC in terms of growing indigence in Argentina, mark a floor for the coming months, where the rise in registered food prices is well above the income of the unregistered population and in the informal sector. At the same time, the increases in services that are coming for the coming months also put a lower floor for poverty in Argentina, which was evident in the first half of 2022,” said Damián Di Pace, director of the consulting firm FocusMarket.
“Inflation in food travels to 90% year-on-year, with an average monthly rise in the category of 6.2%, while the average for the region in Latin America is 1.3%,” added Di Pace.
Some products of massive consume and of First need, in fact, still grow above the year-on-year average. For example, according to the Focus Market survey with the September increases, it stands out that sugar climbed 195% compared to the same month of 2021; kitchen rolls, 156%; eggs, 155% and toilet paper, 145%.
This has a full impact, too, on consumption. As revealed by Víctor Palpacelli, president of the Argentine Federation of Supermarkets (FASA), in September there was “a retraction in consumption of between 4% and 5% in units sold in the year-on-year comparison”.
“Undoubtedly, in inflationary scenarios like the one we are experiencing, this hits the consumer’s pocket squarely and consumption contracts. That is the concern we have,” he remarked.
headline inflation
As highlighted in the Market Expectations Survey (REM) released last week by the Central Bank, inflation is not expected to break 6% in the remainder of the year. For October, the consultants consulted by the BCRA estimate a rise in the CPI of 6.2%.
“What we are seeing for October is that inflation would maintain a floor of 6%, the same as in November and December. In October, services are going to rise above goods: regulated prices weigh heavily, there are increases in water, electricity and gas, telephony, cable, private schools. This is going to hit hard in the services indicator, which is going to have the biggest increase of the year during this month”, said Di Pace in this regard.
In addition to public services and the item “telecommunications”, increases are also expected for this month of the prepaid (up to 11.5%), the expenses (for the payment of part of the extraordinary bonus to building managers and the impact of the removal of subsidies on services for common spaces); in addition to the aforementioned increases in private schools.
Fuels also rose at the beginning of the month, with average increases of 6%: These increases are usually transferred to prices, in one way or another, since it increases the logistics and distribution costs of the goods.
Thus, according to the REM, it is estimated that in December inflation will reach 100% year-on-year. A figure that is 5 pp above that projected in last month’s survey.
Source: Ambito
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