Since his arrival, Milei has been determined to remove the State from price control in many sectors of the economy, arguing that relative prices had to be regulated after several years of imbalance. As a result, In August, annual inflation in services was higher than that of goods for the third consecutive month.
In particular, a report from the Public Policy Observatory of the University of Avellaneda (UNDAV) He stressed that since the repeal of the Rental Law, Rents jumped 213%, 66 percentage points above the CPI which climbed 147% between December 2023 and August of this year.
In the same sense, UNDAV added that Internet and telephone services increased by 201%also well above average inflation. “The government is at a crossroads as deregulation seems to complicate the goal of reducing inflation,” warned the observatory.
Internet UNDAV.jfif
On the other hand, the report also raised an alarm when it saw that the core inflationwhich does not consider regulated prices or seasonal factors, is accelerating.
Services put upward pressure on inflation
In August, goods rose 3.2%, while services climbed 6.5%. Within this second group, the increases in Housing, Transport, Communications and Restaurants and Hotels. These four categories accounted for 1.8 of the 4.2 points of inflationaccording to the CP consultancy.
Specifically, there were increases in rent, electricity and gas rates, and public transportation tickets in the Metropolitan Area of Buenos Aires (AMBA) those that had the greatest impact on the increase in services.
Between September 2023 and January 2024, goods had increased strongly above servicesin a context of frozen rates, to which was added the devaluation of December, which had a greater impact on the price of food.
The gap narrowed considerably from February onwards, and In June the trend was reversedIn the eighth month of the year the difference was 36 percentage points (263.9% vs 227.3%).
Source: Ambito
