November inflation surprised consultants: how much the seasonal factor influenced it and what is expected for December

Inflation slowed for the third consecutive month in November and was below what the market expected. One of the particularities of the Consumer Price Index (CPI) was the deflation that occurred in the seasonal price category. Specialists who spoke with Ámbito highlighted that this was a determining factor in the divergence of the real data and previous expectations.

As reported by INDEC this Wednesday, the general CPI rose 2.4% in the 11th month of the year, when the consulting firms and financial entities that participated in the last Market Expectations Survey (REM) had estimated 2.8%. At the product level, The divisions that presented the smallest variations were home equipment and maintenance (+1.5%) and food and beverages (+0.9%)..

Among the latter, they stood out sharp drops in vegetable prices due to seasonal reasons; In Greater Buenos Aires, there were losses of between 14% and 31% in potatoes, onions and tomatoes. “Clearly the negative sign in the seasonal category, basically vegetables with an average drop of almost 13%, had its impact on the general index, contributing to the process of slowing inflation,” he said. Gonzalo Semillachief economist at CREEBBA.

According to the consultant LCGWithin the Seasonal Vegetables, the fall stood out (-12.9% in GBA), already accumulating 4 months of consecutive falls, the slowdown in inflation in Clothing (-2.5 percentage points) and Restaurants and Hotels (-0.7 points).

Why didn’t the consulting firms catch the deflation in fruits and vegetables?

In this regard, Rocio Bisangeconomist EcoGoexplained that most consulting firms, due to a question of resources and scale, focus on surveying online prices of supermarkets and large-scale stores, which leaves out small businesses that have different pricing strategies, “much more sensitive to changes in wholesale prices, particularly in items such as fruits or vegetables where climate variability usually affects quite a bit“.

In that sense, he explained that the EcoGo survey “practically did not capture the drop in the price of vegetables and inflation ended up being a little lower than we expected.” “In fact, “If we do the calculation for the GBA, inflation, excluding vegetables, would reach 3.1%, instead of the 2.6% that was actually recorded”he assured.

Looking forward, Bisang foresees a possible “rebound in seasonals, more than anything because of the holidays and summer vacations“As for fruits and vegetables, beyond the usual harvest and planting times, it will depend on the weather conditions,” he explained.

Semilla also marked the climate as a key variable and sees that the “good rains in the north and center of the country” and the “very good production, implies greater supply and therefore lower prices”therefore the dynamics of vegetable prices can be sustained in December.

Furthermore, he added that the production of pears and apples for the domestic market, which are seasonal and subject to withholdings, can also put downward pressure on prices, as well as influence the devaluation in Brazilwhich affects the lowering of imported fruits and vegetables.

At LCG they expect lower increases in regulated prices for the last month of the year, which would set a floor of 0.5 percentage points for inflation and that “seasonal ones would make a greater contribution as a classic component of this time of year“.”We expect general inflation levels again between 2.5%/3%. It is difficult to think of a marked deceleration that would allow us to reach the 1% monthly records sought by the Government for this current month,” they projected.

INDEC inflation was also distanced from the CABA CPI

Inflation published by INDEC It not only distanced itself from private estimates, but also from the CPI published by the City of Buenos Aires (CABA) this week, which marked 3.2%. As explained by Fundar’s Director of Productive Planning, Daniel Schteingart, this was due to two reasons.

Firstly, CABA’s consumption habits are quite different from the national average, since the capital has a higher weight of services, which rose more than goods. Secondly, because CABA has a consumption basket based on 2017-2018 patterns, while INDEC’s is from 2004-2005.

With the numbers published by the INDEC on this day, interannual inflation reached 166%, while the accumulated inflation for 2024 resulted in 112%, with only one month left until the end of the year.