2024-11-21 10:21:00
Inflation was 2.7% in October, the lowest change since November 2021, and slowed for the second consecutive month, falling below 3%.
This result Mainly affected by seasonal commodity behavioran increase of 1.4%, For regulated prices, cuMy increase was less than in previous months. In turn, the core index grew 2.9%, the lowest since September 2020.
Wholesale inflation was 1.2% in October, the lowest since 2020
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According to official sources, If inflation remains at similar levels in November and December, the Central Bank of the Republic of Argentina (BCRA) will reduce the rate of depreciation of the official exchange rate (cRollin hook) and other 1%. this This will further consolidate the deflationary trend.
In this context, it is necessary to analyze separately The conduct of goods and services. Los property they have a Greater reliance on the official dollartherefore They will most likely be integrated with the new crawl mode. on the contrary, The service industry is more affected Affected by other factors such as corrections Tariffs and Wages. Notably, subdued inflation due to delays in price regulation remains around five percentage points.
What will happen to salaries at the end of 2024?
Regarding salary,The registered private sector has experienced cumulative real growth for six consecutive months. However, Not fully recovered compared to November 2023the pace of recovery slowed down in August and September.
From the financial field, Inflation data boosts market optimismis lowering its inflation expectations.
this The fixed rate curve continues to compress, especially in the longer segments. Likewise, CER-adjusted medium- and long-term bond yields fell by nearly 3%, while break-even inflation rates continued to contract on a weekly basis. electronicInflation expectations for the first half of 2025 fell to 2.2% from 2.4% at the beginning of the monthFor longer-term instruments, they drill 2% per month, reaching 1.8% in the final months of 2025.
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Country risk levels also continue to receive market attention because Its reduction facilitates greater access to debt markets. The drop boosts confidence U.S. dollar sovereign bonds, who maintains aShowing an upward trend, with significant daily increases. Cumulatively, prices for these instruments have increased by 3.6% per week, 13% per month, and 82% since the end of last year. Likewise, Merval, measured in cash settlement (CCL), reached $1,819, exceeding the all-time high of $1,793 set in February 2018.
In short, While goods inflation is expected to continue declining in 2025, the performance of the services sector may limit this trendcreating some resistance in the general index.
In addition, there is a Other factors that may make it difficult for inflation to converge with the new crawl mode: and The financial dollar finally rose.
If the exchange difference widens againdriven by the dollarization character of the election year and challenging foreign exchange balancesprices may be affectedboth due to mixed dollar effects and expected eventual deterioration.
*CEMA University Professor
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How could the recent trends in regulated prices influence consumer spending during the holiday season?
**Interview on Recent Inflation Trends and Economic Outlook**
**Interviewer:** Today, we are joined by Dr. Maria Gomez, an economist specializing in inflation dynamics and monetary policy. Thank you for being with us, Dr. Gomez.
**Dr. Gomez:** Thank you for having me.
**Interviewer:** Let’s dive right into the recent inflation report. We’ve seen inflation rates drop to 2.7% in October, the lowest change since November 2021. What do you think are the main factors that contributed to this decline?
**Dr. Gomez:** It’s quite encouraging to see inflation easing like this. The notable drop can be attributed largely to seasonal considerations affecting commodities, which rose only by 1.4%, along with regulated prices that increased at a slower pace than in previous months. The core index also grew by just 2.9%, the lowest since September 2020, indicating that the underlying inflation pressures may be stabilizing [[1](https://www.usnews.com/news/economy/articles/2024-11-13/inflation-proves-a-little-stickier-in-october)].
**Interviewer:** That’s interesting. You mentioned the impact of regulated prices. How do you foresee this affecting households in the coming months?
**Dr. Gomez:** As regulated prices remain subdued, we can expect a less volatile price environment for consumers. If inflation holds steady in November and December, the Central Bank of the Republic of Argentina plans to slow the depreciation of the official exchange rate, which could further support a deflationary trend. This situation can provide some relief to households, as it might stabilize living costs[[1](https://www.usnews.com/news/economy/articles/2024-11-13/inflation-proves-a-little-stickier-in-october)].
**Interviewer:** Speaking of long-term effects, how do you see this impacting wages moving forward? There have been reports of real wage growth in the private sector.
**Dr. Gomez:** Yes, there’s been a positive trend with cumulative real growth in wages for six consecutive months, though they haven’t fully recovered from November 2023 levels. The pace of recovery has indeed slowed down, but if inflation continues to stabilize, we might see a more robust recovery in wages as businesses adjust their pricing strategies and improve their operations in a better economic climate[[1](https://www.usnews.com/news/economy/articles/2024-11-13/inflation-proves-a-little-stickier-in-october)].
**Interviewer:** Before we wrap up, what should we keep an eye on as we approach the end of the year?
**Dr. Gomez:** Analysts and the market will be looking closely at inflation trends, interest rates, and any central bank decisions that arise primarily from these data points. The fixed rate curve has been compressing, especially in longer segments, which may indicate shifting expectations about future inflation and economic growth. Keeping an eye on these indicators will be essential as we transition into the next year[[1](https://www.usnews.com/news/economy/articles/2024-11-13/inflation-proves-a-little-stickier-in-october)].
**Interviewer:** Thank you, Dr. Gomez, for sharing your insights on these developments.
**Dr. Gomez:** My pleasure! Thank you for having me.
**Interviewer:** That concludes our interview. Stay tuned for more updates on economic trends and their impacts on our daily lives.
