The monthly inflation reached 25.5% in December of last year and then began a path of deceleration that had as its main factors the consumption collapse and the sharp drop in purchasing power. That path remains firm and, in that sense, For April, the main consulting firms predict that the consumer price index (CPI) could once again reach single digits.
Even the Government itself is confident that, after the 11% in March reported by the National Institute of Statistics and Cendos (INDEC), in April, the CPI will be below 10%. Even in the Libertad Foundation dinner President Javier Milei pointed out that “the economy is going to rise like a diver’s fart” and stated: “We are achieving it, we are ending inflation”in an optimistic tone.
Inflation in single digits: what it depends on and at the cost of what
So far in April, private consulting firms highlight a decline in the segment Food and drinks, one of the items that most affects the general measurement. If this trend is confirmed, the price index could be below 10%.
In fact, the consulting firm’s weekly inflation measurement Labor Capital & Growth (LCG)founded by the former Minister of Economy and Senator, Martin Lousteauhighlighted that, in the fourth week of April, a slowdown in the variation in food prices of 0.8 percentage points was observed, reaching 0.7%.
Besides, “the increase averages 3.3% in the last four weeks and 2.8% if measured from end to end in the same period”points out LCG.
“We see a non-negligible probability that April inflation will be in single digits”they assured from LCG after the clear slowdown in food prices and “deflation” in some products.
However, they highlighted the “recessive scenario” that Argentina is currently experiencing and they focused on the salary recomposition and how this could impact the inflationas well as the dollar pricewhich still continues to function as an anchor.
For its part, Rocío Bisang, economist of EcoGo, He pointed out in dialogue with Ambit that, according to the measurement of the consulting firm Marina Dal Poggetto, the inflation would be between 9% and 7%although the final number will depend on how the reduction of prepaid fees.
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How does the reduction in prepaid installments impact inflation?
It happens that another of the factors that could affect the inflationary slowdownas mentioned EcoGohas to do precisely with the price reduction of the prepaid fee after the presentation of the Government of Javier Milei in Justice for roll back “abusive” increases after the deregulation of prices through the mega DNU.
On average, The prices of prepaid installments have risen up to 154% so far in 2024: 40% in January, 27% in February, 20% in March and up to 19% in April, according to the different companies.
It is still really unknown if there will be a “return” as the Government requested after the precautionary measure, but the companies already estimated that there will be a 20% average reduction in May.
Meanwhile, regarding the food increase, Bisang estimated that it will be close to the 5.5% in the fourth month of the year and highlighted that the main increases are still those of regulatedin particular, of gas rates and water.
Inflation, still in double digits
For his part, the economist Claudio Caprarulodirector of the consulting firm Analyticssaid that they estimate that April inflation will be close to 10%, with the core again below double digits.
“The biggest increases are in regulated prices, driven by the increase in gas. In food and beverages, the inflation rate continues to decline. As of April 19, we registered an increase of around 3%, which allows us to project smaller increases than in March, for when the month closes,” explained the director of Analytics.
In agreement with LCG, Caprarulo highlighted that the main factors of the slowdown have to do with a “quasi-frozen” dollar and “a sharp drop in demand”.
Source: Ambito
