In Aprilthe Not only did the fall in consumption not stop but it deepened its contractionto the point that suffered the biggest drop so far this year. He Consumption Indicator (IC) of the Argentine Chamber of Commerce and Services (CAC) reflected in the fourth month of the year 4.5% decline in the interannual comparison (ia).
This indicator developed by the CAC shows the evolution of the household consumption of final goods and services on a monthly basis, expanding and complementing the information contributions made by the Chamber to the monitoring of commerce and economic activity.
In this way, the IC accumulates in the first four months of the year a decrease of 3.4% yoy, marking a deep deterioration in consumption at the beginning of 2024. The downward trend in year-on-year growth rates exhibited by the IC from January and April 2024 marks the highest negative value of the year.
In any case, the CAC figures showed a seasonally adjusted increase of 0.6% compared to the month of March (that is, discounting the usual seasonal effects of consumption throughout the year).
This occurs in a economic scenario where inflation continues to slow and has returned to a single-digit monthly value. In April 2024 the monthly rate was 8.8%, with a year-on-year rate of 289.4% and a cumulative annual rate of 65.0%.
While the inflation rate continues to slow, The main item that contributed to the price increase during the month of April was the rates for public services such as gas and water. This increased housing expenses and decreased families’ disposable income.
However, the implementation of the change in the form of adjustment of retirement mobility based on past inflation, the $70,000 bonus for the recipients of the minimum wage and salary adjustments for formal workers in a dependency relationship brought about a slight recomposition of a disposable income that was being punished month by month.
Recently, the Government announced a new postponement of the rate adjustment and the path of disinflation should continue, giving a break to the purchasing power of households, estimates the CAC.
The performance of the Argentine economy and consumption present a similar behavior, which is expressed in interannual variation rates that usually increase or decrease along the same lines. In 2024, the AIs of both the EMAE and the IC present a negative initial behavior. In April, the IC went through a new contraction, while the Argentine economy showed a new negative variation during February.
Fall in consumption: item by item
When analyzing the performance of some areas in particular, a general dynamic of interannual decrease is observed with respect to the values of April 2023, with the exception of transportation..
The category of clothing and footwear showed in the fourth month of the year a estimated decrease of 21% yoy, with a negative contribution of 1.4% to the decline of 4.5% yoy in the CI. It is explained by a real household income that fell in year-on-year terms, causing the postponement of consumption that is not essential for daily life.
On the other hand, the chapter of transportation and vehicles showed a estimated increase of 2.1% yoy. in April, contributing positively by 0.3% to the interannual variation of the CI. The increase is explained by a level of automobile registrations that remained relatively stable and a slight decrease in the price of gasoline.
Recreation and culture showed a decrease of 34% yoy in April (with a negative contribution of 2.6 pp to the IC). This is explained for the same reasons as the clothing and footwear segment: the drop in real income reduced purchasing power and postponed access to goods and services related to leisure.
Regarding the section of housing, rents and public services, This showed an estimated decline of 23% ia in April of this year, which is mainly explained by the decrease in disposable income and a moderate increase in water and gas rates.
With respect to rest of the items, these experienced an estimated contraction of 0.8% yoy in April (and an incidence of 0.4 pp), positioning itself at levels 3% above pre-pandemic levels.
Source: Ambito
