The wholesale inflation slowed down by third consecutive monthsince in October it marked 1.2%. Within the indicator you can see a drop in imported prices (-0.5%), as reported this Tuesday by the Institute of Statistics and Censuses (INDEC). In this way, the measurement was well below the Consumer Price Index (CPI) of the same period, which stood at 2.7%, and was even minor to the rhythm of the “crawling peg” in which the official dollar moves.
In dialogue with Scopethe economist Gabriel Caamaño, of Ledesma Consultantwarned in his analysis that the CPI and the IPIM are “two different things” due to the way they are measured, since while the CPI is a monthly average, wholesalers is a comparison of 15 of a month against the previous month. “What explains why it has given 1.2% is the drop in the export exchange rate, the poor performance of commodity prices and what remained of the impact of the PAIS Tax”he expressed.
“It is also due to the disinflation process, which is a single process and affects all price indices”said Caamaño but clarified the differences that each measurement has, while “The tradable component of the IPIM is much higher than that of the CPI and has been falling faster, the IPIM had more inflation at the beginning with the devaluation and now it deflates faster than the CPI”.
For its part, Claudio Caprarulodirector of Analyticstold this media that it is a “positive sign because wholesale inflation continues to decelerate, giving room for it to also the same dynamic is maintained with respect to retail prices“. For the latter, from this consultancy, they project that what Milei indicated will be fulfilled regarding it continuing in percentages similar to those of October, for which If it complies with what was indicated, the crawl rate would drop to 1% per month.
The Government celebrated this information. The economist, Martin Vauthieradvisor to the current administration, assured that this is the lowest wholesale inflation since May 2020, and the lowest for the month of October since 2016.
Wholesale prices: the data left by the index
The general level of the Wholesale Domestic Price Index (IPIM) registered an increase of 1.2% in October and this was a consequence of the 1.3% increase in “Domestic Products”, partially offset by the 0.5% decrease in “Imported Products”, as mentioned above.
“Given that the prices of imported products respond mainly to the exchange rate and the corresponding devaluation, The ‘crawling peg’ pace set at 2.2% monthly has translated into a marked decline in imported prices after the exchange rate jump recorded in December. Furthermore, the recent evolution of prices contributes to this trend,” they explained from ACM.
Besides, The general level of the Wholesale Basic Internal Price Index (IPIB) showed an increase of 1.2% in the same period. In this case, the variation is explained by the 1.3% increase in “Domestic products”, partially offset by the 0.5% decrease in “Imported products”.
In addition, The general level of the Basic Producer Price Index (IPP) registered an increase of 1.4% in the same periodas a consequence of the 2.1% increase in “Primary Products” and 1.1% in “Manufactured Products and Electrical Energy”.
“If we evaluate the evolution of wholesale prices (179.7% y/y) and retail prices (193% y/y) year-on-year, we can see that the spread between both is 13.3%, registering an increase of 1 .6 pp compared to the previous month. With the October data, there are now three consecutive months in which retail prices grow above wholesale prices.”they closed since ACM.
Source: Ambito
David William is a talented author who has made a name for himself in the world of writing. He is a professional author who writes on a wide range of topics, from general interest to opinion news. David is currently working as a writer at 24 hours worlds where he brings his unique perspective and in-depth research to his articles, making them both informative and engaging.
