2024-04-17 23:45:00
After knowing the 11% inflation in Marchprices experienced a sharp slowdown in the first half of the month and the general index might return to single digits during April. This is clear from the high-frequency measurements of different consulting firms, supporting the forecasts of Javier Milei’s government on inflationary dynamics.
In the opinion of the Minister of Economy Luis Caputothe path of falling cost of living responds to the implementation of a battery of measures that are guided by fiscal balance and the recomposition of the country’s international reserves. Central Bank of the Argentine Republic (BCRA).
Low inflation and controlled monetary framework: the keys to opening the stocks
Although the monetary squeeze and the stability of exchange rates had an effect on the prices of the economy, there is consensus among economists regarding the predominant role played by the recession as a moderating factor from inflation.
As salaries and, therefore, the purchasing power of Argentines suffer, consumption is reduced and consumers stop accepting increases. Consequently, The contraction in demand sets a ceiling on remarks of products and slows down the inflationary process.
April inflation: how prices evolve
EcoGo reported that in the second week of April, food registered an increase of 0.2%, marking a considerable decrease compared to previous weeks. “With this data and considering increases projected for the remaining weeks of 1.3%, inflation in food consumed within the home would amount to 5.4% in April,” they stated.
In this sense, the firm of economist Marina Dal Poggetto projected a general price level of 8.9% for the entire month: “The decrease in the projection compared to the previous week responds to food inflation data that is considerably lower than expected, along with few increases in the rest of the items, which leads to modifying our projections for the coming weeks downwards. “.
For its part, the foundation Freedom and Progress measured an increase of 9.5% monthly in the first half of April, slowing down 1.1 points from the 10.6% recorded at the end of March. In this way, it would translate into a reduction of 1.5 percentage points in relation to the Consumer Price Index (CPI) for March, which stood at 11%.
“In the second week of April the variation was 0.4% weekly, the lowest record in 6 months. You have to go back to October 2023 to find a similar increase. In this way, we project that the increase in the CPI LyP in April would be 9%being the first single-digit variation since October 2023,” they indicated.
April inflation: economists’ forecasts
The economist of the liberal organization, Emilio Pradomaintained that “although April inflation will be explained to a greater extent by the increase in regulated prices, the other goods of the economy present a slowing dynamic as shown in the second week of the month and reflected in core inflation around 7% monthly”.
“Forward, We expect the pace of price increases, on average, to be increasingly slower. The speed of this will depend on the Central Bank continuing with its issuance austerity and whether the commitment to achieving a zero fiscal deficit is consolidated as the months go by. In that sense, a legislative scenario that accompanies a tax reform will be a better alternative to the current liquefaction of pesos,” Prado added.
For LCGthe second week of the month closed with an inflation of 0.2% in food and beverages, the lowest record since July 2023. At the same time, the measurement experienced a decline of 0.2 pp. in the weekly comparison. Thus, the rise accumulated 0.6% in the first fortnight.
The indicator basted four consecutive weeks with inflationary dynamics below 1%. “The increase averages 6.2% in the last four weeks and 2.1% end to end in the same period,” explained the authors of the report.
Within the report, only four of the ten categories recorded increases: dairy products and eggs (4.2%), condiments and other food products (1.1%), beverages and infusions to consume at home (0.6% ) and meats (0.4%).
On the contrary, fruits (-0.1%), oils (-1.5%), vegetables (-1.8%), baked goods, cereals and pasta, (-2.2%), and sugar , honey, sweets and cocoa (-3.3%) showed deflation. In other words, the prices of the mentioned products decreased.
Meanwhile, C&T Economic Advisors reported an inflation of 0% in the second week of the current month. “In food and beverages it gave us a total drop of 0.4% and when you look at foods in particular, those consumed at home, gave a drop of 0.8%“explained the director of the consultancy, María Castiglioni Cotterin dialogue with Canal E.
From the perspective of the economist, as a scenario of rising financial dollars is not validated and with the official exchange rate advancing at a monthly rate of 2%, “we are seeing in the month of April It is a very marked deceleration in core inflation”, which does not take into account regulated or seasonal prices.
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