Despite the slight decrease in the Consumer Price Index (CPI) compared to the previous month, the forecasts are still not encouraging.
On the other hand, core inflation, which excludes regulated and seasonal prices, also showed a significant slowdown since September, standing at 8.8%.
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The National Institute of Statistics and Censuses (INDEC) presented the latest data last Monday inflation corresponding to the month of October, showing a monthly rate of 8.3% and a year-on-year 142.7%. This last data indicated a marked deceleration compared to the previous month’s recordwhich was around the 12.7%.
However, despite this decline, the categories that led the increases in this period were “Communication” and “Clothing and footwear“, with increases of 12.6% and 11%, respectively. These numbers show that the accumulated inflation in the first ten months of the year It already reaches 120%, evidencing the complexity of the current economic situation.
On the other hand, core inflation, which excludes regulated and seasonal prices, also showed a significant slowdown since September, standing at 8.8%. Although this decrease is notable, it is still considerably high compared to previous months. In year-on-year terms, this is the highest level since 1991, in a period when the country was recovering from a hyperinflationary crisis.
What do the City gurus estimate in the REM?
In line with this, future projections indicate that inflation will remain high. According to the REM forecasts of the Central Bank (BCRA) for 2023, inflation expectations were adjusted upwards, increasing by 11.4 percentage points, going from 169.3% to 180.7%. This would imply two consecutive years with inflation considerably above 100%.
Despite the slight decrease in the Consumer Price Index (CPI) compared to the previous month, the forecasts are still not encouraging, since expectations are not stabilized and certain monetary policiessuch as the increase in the BCRA’s remunerated liabilities, do not seem to contribute to this stability.
In what areas is it beneficial to invest?
In this challenging scenario, where maintaining pesos without investing implies a significant loss of purchasing power, from the IOL Investonline Research suggest that assets indexed to Reference Stabilization Coefficient (CER) are the best option to protect value against inflation.
In that sense, they propose some alternatives to enhance savings and rprotect your capital from the increase in prices in the Argentine economyto:
For the short term, we recommend investing in the National Treasury Bill X18E4, which adjusts its capital by the CER, thus allowing the inflationary impact to be balanced. Due in January 2024, it currently offers a yield of CER +6.2%, with an estimated annual return of 270.9%. This option projects an estimated $1,260 per $1,000 invested at maturity, exceeding both inflation and a fixed term.
Regarding the medium term, we consider it appropriate to add to the portfolio the T4X4 national CER bonusexpiring on November 14, 2024. This instrument also operates with considerable volumeoffering a yield of CER +7.4% and an estimated annual return of 317.9% to date.
Source: Ambito
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