Inflation data for August stood at 4.2%, and the cumulative figure for the year was close to 95%according to the National Institute of Statistics and Census of the Argentine Republic (INDEC). It was higher than expected and exceeded the forecasts of the Market Expectations Survey (REM) which publishes the Central BankThe Government was unable to get the 4% drilling to take place, as it had hoped, and, out of concern, the ruling party is beginning to seek explanations for this situation.
Fausto Spotorno’s explanation of the 4% inflation
One of those who spoke on the subject was Fausto Spotorno, chief economist at Orlando J Ferreres and Associates and former member of Javier Milei’s Advisory Committee, who pointed out on his account on social media X (ex-Twitter) that inflation remains at 4% due to “an inherited monetary excess.”
“Inflation remains in the 4% range. Firstly, because there is still a monetary excess inherited from past quasi-fiscal deficits.“, says his tweet. And he believes that “only in August the government managed to end this problem.” “Added to this is a price reordering process that does not help to stop the process,” he indicates.
“The government only managed to put an end to this problem in August,” Spotorno’s tweet says, referring to the legacy issue he mentions. He adds that, in addition to this, there is a price reordering process, which does not help to stop the process.”
What lies ahead
According to Spotono, “if monetary and fiscal policy are consolidated in the future and the exchange market is unified, inflation will probably break through these figures. But there are several challenges ahead: rate increases, reductions in withholdings and access to global markets.
And, in this sense, he believes that “getting rid of restrictions is essential, as is deregulating the economy and establishing clear perspectives and rules for the future.”
August inflation worries the Government: the disaggregated
The sector that includes Housing, water, electricity and fuels advanced 7% in August and led the increases in all segments. According to the official body itself, it was due to Increases in the costs of rent, water, electricity, gas and fuel. He followed him Education that shot up 6.6% for the advancement in the quotas of the different levels and types of education. And Transport, with 5.1% due to the increase in public transport fares.
One of the facts to highlight is that core inflation also accelerated, reaching 4.1%. Thus, in recent months, far from falling, It bottomed out at 3.7% in May and June, then rose to 3.8% and then settled at its current level. The categories are completed by regulated prices, with 5.9% due to increases in public service rates, while Seasonal sales increased by 1.5%.
Source: Ambito
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