2024-03-29 15:15:00
Since the month of March began, the projections have been predicting a slowdown in the rate of inflation, which the government itself has been warning regarding, as the Minister of Economy announced just 5 days ago. Luis Caputo by stating that the inflation is “in single digits” monthly although – for the moment – the Indec index “does not reflect it.”
Inflation in March will be lower compared to February but would remain in double digits
This information seems to be shared by the consulting firm Ecolatina who revealed that, in the last week of March (inflation) showed the lowest nominal value in months. “The 1.1% weekly variation that we register is equivalent to a monthly inflation of 5% and only 78% annually“, they noted in the measurement, while indicating that “Massive consumer goods showed increases of 1.1% on average during the fourth week of March.” The data was shared by the journalist Liliana Franco on their social networks and was retweeted by President Javier Milei himself this morning.
LAST INFLATION DATA According to @Ecolatina_Arg: The last week of March showed the lowest nominal value in months. The 1.1% weekly variation that we recorded is equivalent to a monthly inflation of 5% and only 78% annually. Mass consumer goods showed increases of 1.1% on average…
— Liliana Franco (@lilianafranco20) March 29, 2024
Regarding the surveys of the month carried out by the different consulting firms, the inflation numbers that begin to arrive reflect a Consumer’s price index (IPC) slightly below what it was in February and They place it between 10.5% and 13%.
What awaits the private surveys on the March CPI
March is a month that seasonally usually suffers the impact of the restart of the school year, with which the latest data translates into good news for the Government. In any case, the lack of correction of gas, water and electricity rates, which was postponed for a while, also seems to have an impact.
Although we are entering an area where it will cost more to lower monthly in large proportions, The consulting companies measure that they are entering the one-digit monthly zone.
The consultant Eco Go places March inflation at a 13,1% monthly one tenth below the February result.
In its survey, the consulting firm that directs Marina Dal Poggetto measures an inflation of food for March of 11.2%a housing inflation of 20.3%affected by rates and rubro education of 32.1%, being a particularly seasonal month with the restart of the school year.
For its part, from the Freedom and Progress Foundationthe CPI survey showed a 10.6% increase in Marchslowing down the pace of inflation more markedly by 2.6 percentage points compared to the official measurement in February (13.2%).
From the consulting firm directed by Aldo Abram they pointed out that “the slowdown in the CPI in March occurs in a month where seasonality usually plays once morest it. However, “As the depreciation of our currency has slowed sharply, this has more than offset the seasonal effect.”
Regarding the pace of price increases, they indicated that “unregulated prices have been rising at a rate of one digit per month. This is explained by the BCRA’s zero emission policy, the stability of the exchange rate and the consolidation of confidence in the new economic direction”.
Regarding more global numbers, they pointed out that In the first quarter of the year the CPI accumulated an increase of 51.1%. “The interannual variation reaches 286.4%, reaching its highest value since March 1991,” they highlighted.
The positive reading data: “We stopped generating future inflation”
The latest data from INDEC confirmed that in the second half of 2023 poverty grew to 41.7% of the population. It is the highest level of poverty in Argentina since the pandemic (42.0%).
Eugenio Marí, Chief Economist of the Libertad y Progreso Foundation, pointed out that ““The inflation we are seeing is the last gasp of what was last year’s silver plan.”.
According to him, “the positive thing is that with the policy of fiscal balance and non-emission to finance government spending has turned off the engines that push the depreciation of the Argentine currency. This is, we stop generating future inflation. Something that is clearly observed in the stability experienced by exchange rates.”
“While it is true that poverty continued to increase in the first quarter, the slowdown in inflation opens the door for it to begin to decline. It is very likely that in April we will see a single-digit CPI, around 9%, and that the downward trend in inflation will consolidate. This in turn will open the door to improving the purchasing power of salaries and pensions, which are beginning to be updated, but in the face of a CPI that is decelerating. And with this, the door also opens to a reduction in the poverty rate,” Marí added.
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