“During the second week of October, the Food Price Survey marked an increase of 1.6%, decelerating 1.2 pp compared to the previous week (2.8% weekly). As a result of an average price increase of 2.2% in the first two weeks of the month, an increase of 4.5% is already accumulated in the periodeven above what was observed in the same weeks of the month of July (4% accumulated in two weeks)”, they pointed out from LCG.
“The percentage of products with increases within the total basket remained around 25% for the second consecutive week. This percentage means that all the products in the basket would be registering a price increase in one month and places the average of the last four weeks at 21%”, the report added.
As can be deduced from the study, in the second week of October the vegetables rose 4.9%followed by the fruits (23%) and beverages and infusions to consume at home (2%). The meatsmeanwhile, climbed 1.1%. While, in the last four weeks, dairy products and eggs accumulate increases of 12%; vegetables 9.4% and meats, 9.3%.
In this scenario, in reference to the rise in Food and beverages during September and to project what may happen in October, from the Center for Political Economy of Argentina (CEPA) they pointed out: “Despite the improvement in the macroeconomic situation in September, A significant increase in prices was observed in this item. This situation is worrying for October. Although it could eventually be considered that part of the price evolution is related to the so-called ‘inflationary inertia’ or the variation of the TC, the observed price dynamics should rather be labeled as ‘speculative inertia’”.
Other surveys, corresponding to the first days of October, also anticipated that it is very likely that food will again run above the general price level this month. By case, according to the Survey of Retail Prices carried out by the consultant Echo GoDuring the first week, the food “already showed a significant increase.” “The survey corresponding to the first week of October showed a variation of 1.7% in food prices compared to the previous week. With this data and considering a variation projection of 1.4% for the remaining weeks, the inflation of food consumed at home in October would reach 7.4% per month”, they pointed out.
For his part, Eugenio Marí, Chief Economist of the Fundación Libertad y Progreso, analyzed the matter: “October is shaping up to be another month of monthly inflation of around 7%, as were July, August and September. Our measurement for the first week of the month gives us a general inflation of 4.5% and food inflation of 5.3%. Both data are slightly above those recorded in the same period in September.
headline inflation
Thus the things, the foods will once again put strong pressure on the general level of inflationwhat in october I would come back around the 6%. “To these increases is added the 4% increase in Fuels at the beginning of the month, the authorization of an 11% increase in Prepaid fees and the planned increases in gas rates (approximately 10.4%) and electricity (14.9%) that would contribute a marginal value of 0.2 pp, but there are still no signs of its implementation this month”, they pointed out from LCG.
In that scenario, by December the consultant projected inflation around 100% per year. “At the moment there do not seem to be anchors that allow moderating expectations: the exchange rate slides at a faster pace but is still perceived to be behind, the rates have an adjustment path planned for these months and it is understood that the correction will be sustained next year as well, wages – at least formal workers, begin to reopen joint ventures with three-digit cumulative increases- and, perhaps most relevantly, the perception that the economic program, which includes the rearrangement of public accounts and limits on Treasury financing via issuance, does not count with visible political support from the entire government coalition,” he concluded.
Source: Ambito
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