With the postponement of the updates to gas and electricity rates and fuel tax updatesprivate consulting firms mostly agree that May could have a CPI close to 5%, or even below this number. From the hand of the retraction of consumption, and of arrears of wagesthe thing is Inflation could continue its sharp deceleration for the fifth consecutive month.
May: at what values do private measurements place inflation
The monthly metrics of the Orlando Ferreres show that the inflation of the last 4 weeks is identical to that of the last moving month. First, in the end-to-end measurement of the last 30 days, the CPI-OJF registered an increase of 5.2% for the general level and 4.4% for the core. Second, When comparing the first 24 days of May against the first 24 days of April, the CPI-OJF marked a general inflation of 4.6% and core inflation of 4.3%. This metric reached its lowest levels since March 2022.
Finally, The variation between the last 4 weeks and the previous 4 weeks, which is a proxy for the pace at which monthly inflation advances, showed an inflation of 5.3% monthly for the general level and 4.4% m/m for the core. These metrics place monthly inflation at its lowest since January 2023, both for the general level and for the core, according to this survey.
To its turn, Econviews indicated that May could end with a monthly increase of 4.7% (considering GBA supermarkets), while Eco Go It projects inflation of 4.6% for May for the general level (although there is one week left in the month). For its part, The C&T retail price survey for the GBA region shows that inflation moderation continues. Camilo Tiscorniadirector of this consulting firm, indicated that in the third week the numbers for all of May are still below 5%.
Claudio Caprarulodirector of Analyticsrevealed in a conversation with this medium, that “At the moment our projection remains at a percentage of less than 6.5% for May”. While Econometricwhich has in front Ramiro Castiñeirafor the third week of the month the increase in the “food and beverages” category was measured at 3%, while The monthly rate for the general level is 4.4%.
Repressed inflation: what factors caused it to fall but could revive it
It should be noted that one of the factors that influenced May inflation to continue with the deceleration was that the Government decided to postpone the increases in gas and electricity rates and the update of the fuel tax that should have been applied from May 1st.
“Because we are comfortable fiscally, We prioritize lowering inflation and not burdening the middle class with more expenses for the moment“, the Minister of Economy had said at that time, Luis Caputoon the social network X.
This Tuesday it was learned that the Government launched a “Transitional Period” to implement a new tariff regime. It is about gradually reducing subsidies on electricity and gas bills, through Decree 465/2024, published this Tuesday in the Official Gazette. This way, the Ministry of Energy will advance with the reduction of subsidies for households Tier 2 (N2, low income) and Level 3 (N3, average income).
Regarding the fuel tax, starting next Saturday June 1st, gasoline and fuels will suffer a sharp increase (the one that I had kept postponing this month) due to the updates of the Liquid Fuel Transfer Tax (ICL) and Carbon Dioxide Tax (IDL) defined by the Government of Javier Milei.
Finally, The contraction in consumption was another factor that was thought to ensure that inflation continued to moderate. Although the official measurements go up to March, the truth is that that month consumption in supermarkets fell 9.3% and accumulated a decrease of 11% in the year, while in wholesalers the decrease was 10.7% against the same month last year.
In the purchasing centers, meanwhile, the drop was 11.3%, one of the periods with the highest level of sales due to the return to classes.
Source: Ambito
