After a very warm end to the year in terms of prices, January inflation would drop by one level, but remain at very high levels. According to private consultancy firms, we are witnessing a double reorganization upwards (values that continue to decline, such as private services, transport and fuel) and also downwards (excessive findings such as coverages that decrease, such as some foods and textiles). . For now, forecasts for the first month of the year range between 20 and 25%.this is a few points below a scorching December.
On Wednesday the government acknowledged that the previous month’s inflation (which will be officially released on January 11) it will be around 30% so much so that the accumulated in 2023 would be close to 200%. “We understand that the problem of inflation is one of the great battles that we have to fight and that we are fighting, and we know very well how to end inflation, but it is a long process,” presidential spokesman Manuel Adorni said today. who described the inheritance he received as “a disaster”.
Adorni, an economist by profession, detailed the consequences of the large distortion existing in some prices, “such as those of fuel or exchange rates”, in the general increases recorded in recent weeks. Currently, Consulting firms estimate that between 9 and 13% will be reported in January, which anticipates another very negative cost of living index. From where? It is not clear why There is a lot of dispersion regarding forecasts.
For Abeceb, Inflation in December was 31.2% and for January it is expected between 25 and 26%.. “A new round of adjustments is expected in fuels, a little less in foodstuffs, prepaid services and other services, especially in AMBA, all as a consequence of the distortion of relative prices,” he said Clarion Elisabeth Bacigalupo, chief economist of that consultancy firm. Sebastián Menescaldi, associate director of Eco Go, Sebastian Menescaldi, calculates this with December’s 10% statistical dragplus price increases for regulated services (transport, prepaid, communications), projects that in January “will close between 22 and 23% inflation”.
Menescaldi believes that “food increases are likely slowing and starting to normalize; Other prices are already limited by demand, as in the textile sector“What has happened is that there have been many rebranding of covers due to uncertainty and now they are being rebranded downwards due to lack of sales,” the specialist points out.
In any case, it is assumed that December’s record will be the highest since the hyperinflation of 1990. “The consumer price index (CPI) showed a notable acceleration in December, rising from 12.7% in November to 24 .7% last month, this being the largest monthly change in the history of the index”, reads the latest Ecolatina report.
The consultancy adds that on an annual basis, inflation rose to 212.3%, “well above the 95.7%” of the same month last year. Like other consultancy firms, Ecolatina explains that “the acceleration responded above all to the dynamics of the dismantling of price agreements (Fair Prices) and the transfer onto prices of the mid-month jump in the official exchange rate (+118%)”.
Thus they allude to the rise of the official dollar, which went from $365 to $800 in mid-Decemberwhich impacted across-the-board increases in heavily import-dependent products (electronics, motorcycles, cars, among others) and the end of the previous government’s anti-inflationary programs, which set limits on monthly increases well below inflation and prices of fuel, which were “in decline”. YPF and Shell increased petrol and diesel prices by between 25 and 26% yesterday at midnight..
“For January we estimate inflation above 25%, while for December we believe it would be around 28%.. That is, we expect monthly inflation similar to December and January, which will accumulate more than 60% in just two months”, introduces Florencia Iragui, economist at LCG. The expert adds that “December was a month in which, due to the the uncertainty of the change of government, the inertia of the previous inflation, the jump in the official exchange rate and the fall of the “Fair Prices” program, food prices increased significantly: in the 4 weeks they recorded a end-to-end variation of 36%.
“This percentage – continues Iragui – leaves a strong brake on the fact that, if for some reason in the next 4 weeks the change in prices was 0%, the average increase would be 12%. This only in food. If we imagine this in all areas, we see that it is difficult for monthly inflation in January to be much lower than that of December.”
Economists take into account that there have already been announcements of increases in fuel, prepaid cards, buses and subways, which “leaves a very difficult first month of the year in your pocket, even if we know that these may be categories that are a little behind in respect to general inflation”, insists Iragui.
Santiago Romero Manoukian, of Ecolatina, agrees that “increases are already being observed in several sectors, which is why January inflation will once again be above 20%, although in principle we expect it to be a little lower than that of December, but very high inflation accumulated in the two months”.
“We are in the eye of the storm, in the hardest phase of the correction of relative prices. where those who are left behind must not only increase a lot, but also readjust above the average”, says the economist. According to him, the government tries to concentrate most of the increases in the first quarter of the year, while its the honeymoon passes with the company. “We see it clearly with fuel,” he concludes.
Source: Clarin
