The June 2024 inflation rate measured by the National Institute of Statistics and Census (Indec) was 4.6 percent. Last month’s price increase was somewhat higher than that of May, which implies a break with the slowdown that began to be recorded following the strong increases that occurred as a result of the devaluation carried out by Javier Milei at the beginning of his administration.
Inflation in the first half of 2024 reached 79.8 percent and the year-on-year inflation reached 271.5 percent. In May, the price increase recorded by Indec had been 4.2 percent.
The June figure is lower than that anticipated by private consultants. In his questioned statements yesterday, the Minister of Economy, Luis Caputo, encouraged himself and predicted that “June will once once more surprise with a surplus and inflation.” And in that context he said he expected it to be “less than 5 percent.”
To stop the problem, he recalled that during June “there was an increase in rates” for public services and transportation. These two factors were influential in the City Price Index, which at the beginning of this week measured inflation of 4.8 percent, just 6 tenths higher than in May, but higher in the end.
Inflation from January to May was lower than the record of 25.5 in December of last year due to the fierce devaluation during the first week of Javier Milei’s government.
The largest increases were recorded in Housing, water, electricity, gas and other fuels (14.3%), in Greater Buenos Aires, Northeast, Northwest and Cuyo due to increases in electricity and gas rates and in housing rent. This was followed by Restaurants and hotels (6.3%) and Education (5.7%) due to increases in all levels of education.
In the Pampas Region and in Patagonia, the main increase was in Food and non-alcoholic beverages (3%). There, the increases in Vegetables, tubers and legumes, Bread and cereals and Milk, dairy products and eggs stood out.
The two divisions that registered the smallest variations in June were Alcoholic beverages and tobacco (2.1%) and Home equipment and maintenance (2.3%). At the category level, Regulated (8.1%) led the increase, followed by Seasonal (4.4%) and the Core CPI (3.7%).
So far in 2024, the slowdown due to the cooling of the economy was as follows: 20.6 in January; 13.2 in February; 11 in March; 8.8 in April; 4.2 in May with an interannual inflation of 276.4% compared to the same month in 2023, and an accumulated 71.9 for the year so far.
The rise in the dollar in recent days, the new increases in electricity, gas, telephone and internet prices, plus the liberalization of the price of prepaid health plans and the halt of some salary parity quotas do not offer a good outlook for July.
The rise of the dollar alone in the last two weeks, driven by the International Monetary Fund’s (IMF) denial of Caputo’s statements on a new agreement, will radiate in the form of an increase in all sectors.
The record high of 1 dollar to 1,500 pesos before the end of the first half of the month will lead to higher prices for food and other key sectors that have been expressing their confusion regarding the economic plan for months.
