After slowing down to 7.8% in May, the inflation would have continued a similar trend in June. This is clear from the first private surveys that were disseminated in relation to the sixth month of the year, which project a CPI variation below 7%. If these forecasts come true, it would be the lowest data since February.
According to the analysis of the consultants, two factors influence fundamentally in this new monthly drop in inflation: on the one hand, they highlight that it is a seasonal issue; on the other, it is due to a lower variation of the item “food”which would have evolved again below the general index and continues with a “downward” trend.
In this regard, according to the survey of Food and Beverages carried out by the LCG consultancy, in the fourth week of June an increase of 0.1% per month was observed, “decelerating sharply against 2.6% of the previous week”.. “Average monthly inflation also slowed to 5.6%, and accumulates a drop of 3.3 pp compared to the peak registered at the beginning of May. End-to-end measure, inflation in food and beverages was 4.1% in June”, they highlighted from the firm.
The oils led the increases for the month, according to LCG, with an increase of 8.8%, followed by dairy products and eggs, with 8.5%. The meatsmeanwhile, they climbed 3.3%while the vegetables they did it 1% and the fruitbarely 0.1%.
During the last week of June, the percentage of products that increased “returned to the levels of the previous weeks: 20%.” “Adding this last data, the monthly average is currently 28%, which means that the total basket adjusted every 3.6 weeks on average,” they highlighted from LCG.
A more moderate evolution of food, the division with the highest incidence within the CPI, helped inflation to slow down again in June compared to the previous month. This was highlighted by the polls of different private consultants.
June inflation
For example, the CPI of the Freedom and Progress Foundation showed an increase of 6.8% monthly in June (In May, this indicator presented a variation of 9.1%). “This result would mark, for the second consecutive month, a deceleration in the rate of variation of the consumer price index,” they highlighted from the firm.
“After the INDEC registers five consecutive months of acceleration, the last two months show a moderation in the monthly rise of the CPI. Despite the above, this does not necessarily mean a slowdown in inflation. In the second quarter of the year the seasonality of prices plays in favorTherefore, the CPI usually registers lower monthly variations than in March. That the June price index is lower than that of May is within what is expected, maintaining the same cruising speed of core inflation,” they detailed.
And they remarked: “It is worth noting that the ‘Food and non-alcoholic beverages’ item was below the general index, increasing 6.2% and following a downward trend. However, strong accelerations in services stand out: ‘Medicine’ (10.1%) and ‘Transport’ (7.2%). Both with incidences of 0.9 percentage points”.
Along the same lines, from the signing C&T detailed that their survey of retail prices for Greater Buenos Aires presented a monthly variation of 6.7%, below the 8.7% that had been measured in May. “The moderation was generalized in the headings, although housing, and food and beverages were particularly relevant”, they explained from the firm.
“Housing, which had increased 11.8% in May, did so by 7.7% in June. Two factors combined: in May there were increases in electricity and gas, while in June there was only electricity, and there was no adjustment in the salaries of building managers,” they detailed.
On the other hand, when analyzing what happened with “food and beverages, the item with the greatest weight”They maintained: “There was a significant slowdown in the first fortnight of the month due to the drop in vegetables and the lower increase in meat. Thus, the item grew 5.2% in the month compared to 8.4% in May. It is worth noting that in the third week of the month food and beverages rose sharply to later moderate in the last week of the month”.
Source: Ambito
