In this regard, from the consulting firm Sarandí they indicated that during 2022 “the global outlook implied more fuel for the inflationary bonfire”. “The acceleration in commodities hit our country directly, given the greater volume of energy imports. A second-order indirect effect also occurred, known as ‘imported inflation’ due to the high dependence on foreign inputs.”, the report highlighted.
“The increase in the cost of intermediate manufactures was transferred to locally produced merchandise. This new international price scenario had an effect on all economies. Countries with historically balanced macro performance moved to inflation levels close to double digits”, he added.
With that scenario, when drawing some prospects for what may happen in 2023from Sarandí pointed out that “They are expected to continue decompressing commodities.” “Without escalation in agriculture and energy, the pressure on domestic prices drops,” they detailed.. “Looking ahead to this year several of the factors that put a high floor to the CPI are punctured in 2022. It is difficult, stopped in January, to assess the feasibility of the official desire to close the year at a uniform 4% per month, equivalent to 60% per year. Between that ambitious objective and something in between, there is a margin of 35 points with respect to the 2022 rod. The base scenario of the vast majority of the analyzes is that inflation is going to drop,” they added from the firm.
From Sarandí, they also detailed other factors that could set the stage for a possible slowdown in inflation: “Without more ups and downs in the course of economic policy, a path of greater macroeconomic consistency seems to have been built. The Government unified the leadership of economic policy. He began to pave the way, reducing the mistrust of the private sector. After the realignment of relative prices there is room for a downward spiral. You can push the distributive bid.”
Expectations and projections
From Ecolatina they also analyzed the different edges that can impact, in one way or another, on inflation during this year: “Above the high floor left by the fourth quarter of 2022 (5.4% monthly)will be added the possible impact of the drought on food prices, a potential ‘awakening’ of the price of beef, wage dynamics, pending adjustments in utility rates and restrictions on imports, factors that will continue to put pressure on the price level”.
“Nevertheless, the moderation of the crawling peg, together with the wide set of price agreements recently closed and without shocks like those that occurred last year (war in Ukraine, resignation of Martín Guzmán) that allow the gap to be contained, inertia and inflation expectations would moderate at the margin. As a result, we expect a slow trend towards nominality moderation in the coming months,” they detailed from the firm.
In this scenario, for the first months of the year inflation is expected with a dynamic similar to that of December. In fact, according to the REM, the CPI would rise 5.6% in January and 5.7% in February.
“We expect the summer months to continue with the dynamics of December: we project a January-February two-month period with inflation not exceeding 5.5% per month. In any case, it is worth mentioning that the current price dynamics responds in part to the Fair Prices program, as well as to the drop in meat prices due to the drought. In turn, the multiple increases agreed in regulated products make stability around 5% of nominal value perceived fragile, especially towards the March/April two-month period”, they projected from LCG.
Source: Ambito
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