It is the second consecutive month with a negative interannual variation since February 2021.
In November, the consumption of goods and services in households fell in November. The indicator of Consumption (IC) of the Argentine Chamber of Commerce and Services (CAC) showed a decline of 4.1% in the interannual comparison (yoy), implying a seasonally adjusted contraction of 6.9% compared to the month of October (that is, discounting the usual seasonal effects of consumption throughout the year).
The IC showed a strong contraction due to the inflationary acceleration and the fall in purchasing power. It is the second consecutive month with a negative interannual variation since February 2021. It is the fifth consecutive month with negative monthly variation.
The magnitudes and positive signs in the year-on-year figures for recreation and housing stand out, showing advances of 2.3% and 1.2%, respectively, although they continue to be two areas that have had the hardest time recovering since the pandemic.
Consumption: how was the annual behavior
In this way, the IC accumulates in the first eleven months of the year a growth of 3.4% yoy, although, in absolute terms, the loss of dynamism seen in recent months continued to deepen. In line with the negative value of last month, the downward trend in year-on-year growth rates exhibited by the IC from January and in November 2023 they mark a new negative value in the year.
This occurs in an economic scenario where the inflation once again suffered a marked acceleration and registered again double-digit monthly change. In November 2023, the monthly rate was 12.8%, with a year-on-year rate of 160.9% and a cumulative annual rate of 148.2%.
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Consumption: why it fell in November
With the inflation accelerating, the disappearance of the last bonuses current and the lack of supply of creditsNovember 2023 was marked by a large contraction in the purchasing power of consumers. In parallel, the effectiveness of VAT refunds continued without having the expected impact. In a context where inflation is still expected to be high, and after an adverse electoral result for the ruling party that reorients economic policy, the expectation is that purchasing power will continue to fall. He tariff increase and possible transfer of devaluation to prices will be key factors for consumption in the coming months.
Fall in consumption: which were the most affected items
- Clothing and footwear: showed in the eleventh month of the year a slight estimated increase of only 0.1% yoy, without a significant contribution to the decline of 4.1% ai in the CI. The stagnation would be explained by the stability in the relative price of the item.
- Transportation and vehicles: showed a estimated growth of 0.1% yoy. in November, having a null impact on the interannual variation of the CI. This was due to a level of automobile registrations that remained relatively constant (only a decline of 0.1% year-on-year). On the other hand, the purchase of gasoline had a moderate increase of 3.2% year-on-year.
- Recreation and culture: showed a growth of 2.3% yoy in November (with a positive contribution of 0.1 pp to the IC) explained by a context of inflationary acceleration and where consumers choose to spend on products for immediate consumption and enjoyment, such as restaurants.
Regarding the section of housing, rents and utilitiesthis showed an estimated increase of 1.2% ia in November of this year, which is mainly explained by a month with lower temperatures than last year.
Source: Ambito
