2023-05-13 03:30:00
Inflation in April at the national level was 8.4%, driven by a strong increase of 10.1% in the price of food that had a direct impact on the low-income sectors, deepening the effects of poverty. With this result, the first four-month period closed with a 32% price increase and the year-on-year rate climbed to 108.8%.
Inflation in April was the highest since hyperinflation prior to convertibility and the trend is for this peak to be exceeded in the coming months.
Concerned regarding the trend, the Minister of Economy, Sergio Massa, and a good part of the cabinet of Treasury officials are preparing measures to try to contain the escalation of prices.
The package of measures will be communicated throughout the weekend. Massa and his “small table” met following the act of the last welding of the Néstor Kirchner Gas Pipeline (see page 6-7). On the fifth floor of Economy, the minister met; his vice, Gabriel Rubinstein; his chief of staff, Leonardo Madcur; and the second vice president of the BCRA, Lisandro Cleri, among other officials. That team would be defining a series of measures that will be announced between Saturday and Sunday.
The data provided yesterday by the National Institute of Statistics and Censuses (INDEC) is almost one point higher than the average of what the private consultants had estimated (7.5%, according to the study carried out by the Central Bank), which already anticipated a worrying rate of increase in the first two weeks of May.
the role of the dollar
It should be noted that this report captured the price spike that occurred at the end of April chen the price of the dollar ran amok and touched $500, a run that caused panic in companies and businesses that in many cases suspended deliveries, restricted sales, and remarked to protect yourself.
With wage improvements that are below these price changes, there is no doubt that poverty levels will increase, the measurement of which will be known a few weeks before the elections, affecting the electoral possibilities of the ruling party. a recent A report from the University of Buenos Aires pointed out that at the current rate, the price of food points to an annualized inflation close to 200%. For the Eco Go consultancy that Marina Dal Poggetto commanded, in the first week of May, prices exhibited a variation of 2.0% compared to the previous week.
“With this data and considering a forecast variation of 1.8% for the remaining weeks, inflation for food consumed at home in May would reach 8.9% per month,” said Eco Go. A similar panorama was expressed by the LCG consultancy, which in its statistical cutoff on Wednesday the 10th observed a rise in the price of food close to 4.8%.
Despite the panorama, the Secretary of Commerce fails to tie the new stage of “Fair Prices” and consequently the first half of May has already been consumed with the program languishing because the companies continue refusing to close the pact. For this month, prices had to adjust only 3.2%, but in the face of the current scenario, food producers began to restrict shipments and the corresponding shelves to empty due to shortages.
The political factor
The stumble of Sergio Massa in controlling inflation frustrated his own expectation of becoming a candidate for president by acclamation and now bidding within the coalition for achieving that objective under the more modest objective of having avoided a greater evil. His latest decisions were focused on maintaining the level of activity, admitting higher levels of inflation, which means assuming high risks.
Another of the data on which the market puts its eye it is core inflation, an indicator to which the Central Bank is paying special attention to define its interest rate policy.
With an 8.4% variation -similar to the general CPI- last month leaves the monetary authority with little room for action and therefore it cannot be ruled out that next week decide a new increase in interest rates by the Central Bank.
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