Inflation in the first quarter of the year is expected to be around 20%, making it the highest quarter since 1991. This indicates that prices continue to accelerate: private forecasts for the year already reach 118%.
The official projection of inflation reaching 60% this year is becoming increasingly nuanced. So far, the only official figure for 2023 is 6% for January. The February one will be released on March 14, but the consultants anticipate it it will be around 6% again. and something similar would happen in March.
“Introduced our retail price survey for the GBA region a monthly increase of 6.2% in Februaryjust below the 6.4% we had seen in January and well above the 4.1% in February 2022,” says consultancy firm C&T in its latest report.
For C&T, with the February data, inflation in the last twelve months has risen to 105%. «If the INDEC CPI showed 6.2%, official inflation would be around 101.7% nationwide, reaching triple digits for the first time since October 1991».
“Closing the second month of the year, the inflation expectation for February is around 6% per month (which would imply inflation above 100% year-on-year) and between 6 and 6.5% for March“, contributes Aurum Valori.
“The February record is already at stake and we expect it to end at around 6% per month, consolidating an inflation floor similar to that of January, and exceeding the 100% ceiling for the first time (101.1% at /a)” anticipates the Capital Foundation. January monthly 6% “broke with the fragile slowdown shown in the last two months of last year“.
The Capital Foundation adds that “March could mark an even higher record, about 6.5% per month, in line with the typical monthly increases associated with the start of the school year and the fall/winter clothing and footwear season.”
Added to this is that two thirds of households will receive an update of the gas tariff, between 40% and 50% depending on the family income (except for beneficiaries of the social tariff who will not have increases), “which would add half a point to the month’s inflation record.”
Furthermore, large commercial and industrial users will have increases of around 70%, which, while not directly impacting the CPI, will do so indirectly through higher costs which will be transferred to final prices.
In turn, starting from this month, the monthly update of the AMBA bus and train fares will be in force, which will be indexed to the IPC-GBA outcome with a two-month delay. In other words, the bus fare will increase by 6% in March (IPC-GBA for January), contribution of 0.17 additional points.
As, “The first quarter of the year would close with inflation around 19.7 pointsthe highest inflation since 1991, and entering a second quarter where risks to price dynamics are deepening”, indicates the Capital Foundation.
The Central Bank’s Survey of Market Expectations (REM) showed that for February the ten consultancies that add up the most correct answers expect a CPI of 6.2% and bring it to 6.3% for March. For these analysts the year will close with inflation of 102.9%, a leap of 7.6 points compared to the forecasts made in January by the same economists.
without anchors
Thus, inflation for 2023 is configured one notch higher than last yearanticipating it to be around 118%, says the Capital Foundation.
This way, “price anchors used in other years (exchange rate and tariffs) are difficult in the current environment, with large relative price differences already accumulated“.
From EcoGo expect a price increase 105% until November. Due to the impact the presidential election could have, they are not estimating what the December number would be.
Going forward, Fundación Capital sees more elements that will put pressure on prices. “Economic policy will continue to focus on a higher nominal value, with greater monetary issuance to support the Treasury, an increase in the exchange rate differential, greater restrictions on imports, exchange rate tensions which cannot be ruled out in an election year and parity which continue to raise inflation expectations”.
In this context, “the reissue of Precios Justos looks like a drop in the ocean”. Furthermore, price anchors used in other years “are difficult in the current environment, with large relative price differences already accumulated.”
In the midst of the escalation, the Government is unable to find solutions to the issue, beyond the extension of price agreements to more and more sectors and for shorter terms, which for analysts have very limited impact.
A few days ago, President Alberto Fernández said in an interview that “February’s inflation was due to the holidays”. And she anticipated that “inflation in March will also be high due to the start of lessons”, even if she risked it easing in April.
Private screenings draw a more complicated scenario. For the consultancy firm FMyA, the CPI for April will continue to hover around 6%. While the top 10 forecasters interviewed by the Central Bank place it at 5.9%. There are no monthly estimates among these advisors for 2023 below 5%.
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Source: Clarin
