According to estimates by the consultancy Ecolatina, in the first half of February core inflation was above 7%, while the general rate in Greater Buenos Aires was 6%..
“The acceleration of more than 2 points in this category would be subtracting an argument for the monetary authority to continue maintaining the Monetary Policy Rate (6.3% of the Effective Monthly Rate) at these levels if it seeks a more positive real rate cushion robust”, says Ecolatina in one of its latest reports.
The report indicates that the IPC GBA Ecolatina showed growth of 6.1% between the first half of February and the same period in January, realizing that the inflationary rebound of January would be consolidating. In this sense, the category that grew the most was the Core CPI, with 7.3%.
Last Thursday, the The BCRA Board of Directors decided to maintain the TPM based on the fact that core inflation for January had remained at 5.4%.
“The monthly acceleration in the rate of increase of the CPI was explained almost entirely by increases in the Seasonal (mainly vegetables and tourism) and Regulated (especially transport, gas and communication) categories, while Core inflation, which reflects the behavior trend of the general level of prices, was located at a level similar to that of December (5.4%, +0.1 pp)”, reported the BCRA.
In that sense, As Ámbito found out, the entity’s directors are “monitoring” the situation day by day. They could well have increased the rate last week after knowing the inflation for January, but preferred to act prudently so as not to send wrong signals to the markets and avoid arousing the expectation that the agency foresees an upward trend for prices in the coming months, taking advantage of the fact that the rate remains in positive territory.
Meanwhile, a report prepared by the LCG consultancy indicates that food inflation continued its upward trend and completed an uninterrupted eight-week run of growth between February 10 and 17, Therefore, in the month it reaches an average increase of 6.4%, the highest since the beginning of November, and 7.2 in the end-to-end measurement. The main boost came from meat, which increased 3.7% weekly.
In this line, Ecolatina highlighted: “The rise in Food and beverages (9.2% monthly) stood out again, given that, excluding this item from the calculation, the Ecolatina CPI would have risen “only” 4.4% month-on-month . In line with expectations, the increase in this division was driven mainly by the jump in beef prices (22.2%), after the 40% increase in live cattle prices since the second half of January”.
LCG maintains that “the country is in a process of inertial inflation” and getting out of it is “complex” because it “requires a regime change.” “By 2023, you cannot expect to have great results in the short term,” added the entity led by Guido Lorenzo, who once again questioned the official guideline of 60% inflation for the entire year “when in reality a floor of 90%, in case there are no financial stress situations from which we are not exempt”.
Source: Ambito
