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Javier Milei anticipated inflation between 20% and 40% for the coming months (December already has a 15% floor)

Javier Milei anticipated inflation between 20% and 40% for the coming months (December already has a 15% floor)
December 10, 2023 – 20:11

During his first speech as president, Milei pointed out that inflation until February will oscillate between those numbers. Without considering future increases, some measurements already estimate 15% for this month.

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During his first speech as president, on the steps of the National Congress, Javier Milei referred to the current economic situation of the country, confirmed that “there is no alternative to adjustment” and that the outgoing Government left “hyperinflation as a legacy”. In this regard, he highlighted that “Inflation today travels at a rate that ranges between 20% and 40% monthly for the months between December and February.”

For now, while next Wednesday the official CPI data for November will be known (consultants predict an increase of around 12%), with only ten days elapsed, December would already present a floor of 15%. This was estimated by a private firm, although the impact on prices of the rise in fuel and an eventual devaluation of the official exchange rate remains to be seen.

From another consulting firm, for their part, they avoided putting an estimated figure for December inflation: the fact is that, although a marked acceleration is discounted, they maintained that It is “difficult to know how much it can close.”

Different surveys already show that food prices accelerated in the first week of December. “In the run-up to the new president’s inauguration, the first week of December closed with an increase of 7.4% according to our Food Price Survey“, they pointed out from the consulting firm LCG, and detailed: “This is an acceleration of 4 pp compared to the previous weeks, which already showed high records. On average, the last four weeks reflect an increase of 12%, but that rises to 17% measured end to end. In turn, 56% of the basket has been reflecting increases every week. This means that all prices surveyed are adjusted at least twice a month, reflecting increasing inertia.”

Full supermarkets and price jumps

Inflation Prices Supermarkets Consumption

Javier Milei anticipated that inflation will range between 20 and 40% monthly in the coming months

Javier Milei anticipated that inflation will range between 20 and 40% monthly in the coming months

Mariano Fuchila

Faced with the possibility of new increases in the coming days, many people decided “stock” during the weekend, a situation that was reflected in different supermarkets and wholesale self-service stores that were filled with consumers throughout the country..

For example, according to a survey carried out by this means, The price of meat increased by close to 15% during the weekend alone in a supermarket chain. The drag on price increases in mass consumer products that was seen after the November ballot, when in many cases lists with price increases of up to 40%, will also impact inflation in December.

On the other hand, as advanced by the new Government, the Ministry of Commerce will put aside price controls. Therefore, it is to be expected that many of the products that were covered by Fair Prices will tend to “adjust” upwards.

In addition, An eventual devaluation of the official dollar will have a new transfer to prices. The magnitude of the same will depend on the jump in the exchange rate and, according to analysts, “on the ability of the Government to set expectations.”

However, and in line with Milei’s statements, some private screenings show that – at least in the current scenario – December inflation may exceed 20%. How much that figure is exceeded will depend on the first measures and how “the market” reacts to them.

“Now a technical term has become fashionable, ‘stagflation’, that is, stagnation with increasing inflation, which is what we have been experiencing until now. The bad thing is that it will not end until the new Government begins to resolve the underlying problems. As? Presenting the roadmap and advancing structural reforms. Eliminating all price and regulated controls. Going out to a single exchange rate. With an independent Central Bank that does not finance the State. “Removing subsidies from public service rates to those who can pay,” said Aldo Abram, executive director of the Libertad y Progreso Foundation. And he concluded: “Only in the second semester will inflation begin to drop and the economy recover. If the reforms continue, then the improvement will accelerate”.

Source: Ambito

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