An international consultant says that Argentina’s inflation will converge at 1% monthly “in the months come”, product of the reduction of “Crawling Peg” to that same rate. Although it warns that this will only be possible as long as no external shock occurs.
This is the consultant PWC That in its last report, called GPS, it points out that “although at the beginning of the year prices continue to slow down, inflation is still at a high level in the international comparison.”
The report performs an analysis of the evolution of relative prices From the beginning of the administration of Javier Milei. That is, what have been the items that have grown more in relation to others. Thus, it states that “continuity in the process of correction of They could involve a certain temporary resistance to a further low of inflation. ”
“From November 2023, the last month of the previous administration, the general price level advanced 179%, where the seasonal category accumulated an increase of 118%, the inflation core 170%and those regulated by 279%”, Says PWC.
The analysis recalls that since purposes of 2019 different restrictions had been imposed to adjust prices of certain services, which began to “distort the behavior of relative prices.”
“If we observe these categories in the April 2019 to November 2023 we find that The general price level advanced 1,222%, The seasoned did 1,782%, the core inflation grew 1,326%, while The regulated only 718%, Little more than half than the general index, ”explains PWC. The study indicates that 14 months later that scenario changed.
Thus, he argues that “having corrected much of it, and with The emission of quasi frozen pesos, of not mediating any exogenous shock ” The expectation is that “Inflation in the months that come quickly to the ‘Crawling Peg’.”
Relative recovery of purchasing power
The analysis also highlights that the decrease in inflation allowed relative recovery in purchasing power.
“As he shows Salary Index published by INDEC, in real terms, all sectors showed their floor at some point in 2024 regarding recent history And since then they have begun to improve, ”it is indicated.
In this regard, it is noted that “the index of private sector salary registered its floor in March, and from there it has recovered 14% in real terms as of December 2024”.
Source: Ambito
