In a few days, INDEC will announce inflation for February, which analysts estimate close to 6%. Meanwhile, calculations on the change in retail prices for March are already underway. Since it is a high season month, mainly due to the start of classes and the rest of the activities, a higher increase is expected than in February: between 6% and 6.5%.
According to analysts participating in the Central Bank’s Survey of Market Expectations (REM), the consumer price index in February reached 6.1% per month, while for March they expect another acceleration up to 6.3%. The decline would only begin in April, with a monthly record of 5.9%. In any case, at this rate, the 60% annual inflation target set by the Government in the 2023 Budget is significantly removed.
The historical tendency of March to be a month of strong pressure on prices, higher than the average of the rest of the year, has to do – beyond the item Education for the start of lessons – with seasonal increases in Clothing due to the change of season.
But also, punctually this March, the persistent increases in meat Vaccine, which skyrocketed in February and pushes the food product which, in turn, explains 23% of the CPI. As happened in February, when they posted increases of 8 to 10% per month, food has left a significant drag for march, estimate by economists.
On the other hand, this month, the increases the rates of water and gas, trains and buses (6%), private (16.4%), fuel (3.8%) and prepaid (7.7%) schools for those with net income of $392,562 or more, and 5% for those with salaries less than that amount, and domestic service (4%).
Regarding the impact of inflation on different socioeconomic sectors, the consultancy firm Ecolatina has analyzed that the greatest pressures on prices fall on the poorest households who consume in local businesses where fair prices do not reach and consumer spending ends up be taller. This factor, added to “the shortage of foreign exchange and drought, as well as the weakness of fair prices complicate research to avoid a greater impact of inflation on the most vulnerable households”, noted in its latest report.
For JPMorgan, meanwhile, expectations are no longer optimistic: “in the midst of high (and rising) pent-up inflation, we continue to expect core inflation to accelerate further as the government moves forward until the October election , pushing the current political framework to the limits.”
“Our baseline scenario assumes headline inflation of 6.0% MoM, on average, in the first half of 2023, accelerating to 7.0% MoM in the second. This path is consistent with inflation as of December 112%,” calculated JP Morgan.
From the Center for Economic Studies Argentina XXI (CEEAXXI) Eliana Scialabba estimates that inflation in February was 6.2% and that, in March, prices will be closer to 6.5%. “We already broke the 100% YoY barrier in February,” he recalled.
“The reality is that the inflationary scale follow the monetary dynamics, and although the government continues to deny it, the data only confirms the theory. Despite the strong sterilization operated by the BCRA, the agents take the future issuance of these pesos for granted, minimizing the demand for the money,” he said.
“This in turn, It is boosted by drought, which drives up the price of fresh food due to reduced supply. In addition, the increase in the price of beef combined with the margin of butcher shops is added to the price increase, which reflects very negative real increases”, explained the director of CEEAXXI.
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Source: Clarin
