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Sunday, March 26, 2023

warn that food accelerated in the first week of March

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It occurred after the item boosted general inflation during February, according to the estimates of different consultants.

Ignacio Petunchi

The surveys of the different private consultancies agreed that the inflation February closed in figures similar to those of January. They also agreed that foods boosted indexpushed among other factors by the rise in the beef and fruits and vegetables. The panorama in the first days of March, meanwhile, does not seem to have changed substantially.

It is that, according to the survey carried out by the Eco Go consultancy, the food basket exhibited a variation of 1.8% in the first week of March compared to the previous week. “This implies an acceleration of the indicator, which doubled, increasing 0.9 pp in the margin,” they detailed. Once again, bovine meat would have been one of the main factors that explained this rise.

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With this data and considering a forecast variation of 1.5% for the remaining weeks, inflation for food consumed at home in March would reach 7.2% per month.”, they estimated from the firm. If this projection is fulfilled, the variation would be lower than the indicator of the consultant showed in February (7.8%).

Waiting for the official data for February, The item “food and beverages” included in the IPC GBA that Ecolatina measures, had a rise of 10.6% last month. When projecting what can happen in March, from the consultant they highlighted that “Different factors will continue to put pressure on an inflationary inertia that is difficult to disarm in the short term.”

And, within those factors that can influence high inflation for March, the firm pointed out: “Among them, the impact of the drought on the price of some fresh foods; margin for a greater transfer to the consumer of the adjustment in the prices of bovine cattle; the dynamics of salary adjustments in an election year; pending increases in utility rates; a currency slide more in line with inflation; restrictions on imports and tensions over the gap and expectations of devaluation in the midst of the electoral transition”.

Referring specifically to what may occur in the food sector, they explained that “although Fair Prices It can contribute to moderate the increases in some sectors, contributing in the margin to moderate the inertia, it presents three main weaknesses that make it less effective”: “Mainly applies to supermarkets and hypermarkets, but not in small self-service stores or local businesses, where households in the lowest income deciles consume to a greater extent; is mainly composed of packaged products, and the difficulty of reaching a broad and robust agreement for fresh food (fruits, vegetables, beef) lies in the great atomization of producers distributed throughout the country, the high rate of informality present in some links and the impact on prices of factors associated with seasonality, biological cycles and/or inclement weather; The shortage of foreign currency will make it difficult to comply with the part that the Government has to play in Fair Prices: guarantee greater access to the MULC, for which reason the risks of some agreements breaking down are not minor”.

Along the same lines, Damián Di Pace, director of the Focus Market consultancy, argued that “Fair Prices are part of a portion of retail sales in mass consumption, but they do not solve the problem of the fall in the demand for money from the Argentine peso and loss of purchasing power that manifests itself with price variations in basic categories in the month of February”.

Another effect that will put upward pressure on food this month is the high inertia left by February. This was estimated by C&T, which estimated food inflation of 9.2% in February: “This dynamic has as a consequence a very important statistical drag effect for March, which for food and beverages is 3.5% and for the total CPI is close to 1.5%, which will enhance the increases that usually occur in that month and those already announced in various regulated items”.

Source: Ambito

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