2023-06-15 15:14:57
The inflation record for the fifth month of the year was 7.8%, accumulating 114.2% in the last twelve months. The official data published yesterday by INDEC offers chiaroscuro when it comes to interpretations. On the one hand it implies an interruption in the upward trend that was observed in the monthly data during the last semester. On the other, it confirms a three-figure path in the annual projection.
in dialogue with BLACK RIVER RADIOthe economist at the Center for Argentine Political Economy (CEPA), Florencia Gutierrez, referred to the implications of price statistics. The specialist assessed the change in trend in the monthly data and indicated that the 7.8% registered in the month of May means that “inflation continues to be high and it is bad, but being a little more moderate than last month, for at least it brings some temporary relief.”
«After five months in which prices grew like a ‘little ladder’, that trend was broken in MayGutierrez said. «The rise was more moderate compared to April, but we are still at a high level of inflation“he warned.
“The removal of subsidies for electricity bills at this juncture is a controversial decision. But you have to understand that this is a request from the IMF, and that removing the subsidies also allows you to have some fiscal relief»
“However, when most of the private consultants warned of a CPI close to 9%, unlike what happened in the previous months, the record was below the forecast. It is valuable because it allows breaking the inertia“he added.
In relation to the reasons that drove the rise in prices in the fifth month of the year, the specialist pointed to “regulated” prices as the main engine. «What increased the most in May was housing, where you have gas, water and electricitywhich grew 11% per month, and where the removal of subsidies on electricity bills had a direct impact, “said Gutierrez.
In this sense, he questioned the government’s political decision to implement the removal of subsidies in a situation where the priority is to be able to control inflation. «It is a debatable decision. But you have to understand on the one hand that it is a request from the International Monetary Fund, and on the other hand, removing the subsidies also allows for some tax relief,” he said. «If the rate increase had not been applied, inflation in May would have been 7%“he added.
On the other hand, Gutierrez highlighted the sharp deceleration of prices registered in the food item during the month of May. «Food and beverages had increases below the general price level, 5.8% below the general 7.8%, and well below the April record when it reached 10%,” he said. “This is mainly explained because meat, which has a very strong weight in the CPI, did not increase at the rate it had been doing in previous months,” he explained.
Finally, the specialist pointed out the incidence of politics in the dynamics of prices. «The market has already been discounting the rumors since April. That they are going to refinance the debt in pesos. That the economy is going to dollarize and there might be an exchange rate leap,” Gutierrez analyzed.
“That is why it is so important that the internal front be armored, and settle inward the differences that any political space may have, moderating the impact on the economy“, he finished.
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