Private consultancies expect inflation to slow in January will bring the record for that month to 20%. Although the index is still very high, it is 5.5 percentage points lower than the level that the consumer price index (CPI) presented last December.
Analysts who experience firsthand the blows to the Argentine economy predict that there was a decline in the month just ended. But the IMF sees it differently: Analyzing the Argentine case, Washington officials stated this the index will be around 25%in line with December
C&T’s retail price survey for GBA showed a 19.6% increase in January. In twelve months the increase was 242.2%.
Inflation in January was affected by a high statistical brake, close to 9% after 25.5% in December. Despite this, for C&T, “the deceleration trend began in the last week of December and continued throughout the month of January”.
“The increase in retail prices in January was driven by leisure, a key driver of the season throughout January, but this year saw a larger increase of 36.8% due to the impact of the adjustment of the official exchange rate and the general increase in prices,” underlined by C&T.
The adjustments to public transport in the GBA, by more than 40%, and the increase in fuel prices also had an impact.
The performance of the Food and Beverage sector was instrumental in the slowdown of the consumer price index in January. These products come from an escalation that made them reach 31% in the last two weeks of December and in January they increased by 16.3%.
“The greatest slowdown occurred in vegetables, which remained almost unchanged between January and December, followed by fruit, which recorded an average monthly increase of 11.7%”, they noted. For their part, meat increased by 16.3% in January, but the weekly evolution shows a significant slowdown. Dairy products and eggs increased by 24% and drinks by 22% monthly.
Consulting firm Orlando Ferreres y Asociados also sees January registrations below 20%. “Inflation in the first four weeks of January accumulates to 16.4% monthly. At this rate it doesn’t seem like we’ll get to 20%.”observed the economist Fausto Spotorno.
The Libertad y Progreso Foundation scores points in the IPC-LyP January 19.4%. “With this change, our CPI slowed by 6.1 percentage points compared to the December data released by INDEC,” they indicated.
Lautaro Moschet, economist at the LyP Foundation, underlined that “the January CPI leaves a 3.1 point drag for February, less than half that of December and the lowest since October. This, in turn, will favor the deceleration for the next month, which we expect, maintaining the current trend, “It will be around 14%.”
Also for EcoGo, the Retail Price Survey (RPM) gives you until the third week of January 19.3%.
However, they warn that “in December the difference between RPM and INDEC was 3.5 percentage points. It is possible that in January we will be lower given that the index is average.”
There is also a slowdown for former minister Domingo Cavallo. “The decline in the last 30 days has been very pronounced. In the first week of the month it was at 35% and reached 13% on January 25th. Taking into account the magnitude of this decline, it is possible that, In the six days following January 25, the average monthly rate approached 20%.”
The consultants’ perception clashes with that of the Monetary Fund, which forecasts inflation of 25% for January.
“After an initial jump, inflation is expected to decline gradually. Inflation reached 25.5% monthly in December (down from around 13% monthly in November) and is expected to will remain above 25% monthly in Januaryas relative price imbalances and other price controls are eliminated.”
Looking ahead, the Fund predicts that “this should be followed by a process of gradual disinflation, in which monthly inflation will reach single-digit levels in the second quarter of 2024, conditional on the achievement of hypothetical fiscal consolidation, the improvement of the monetary policy framework and the reduction of companies’ profit margins”.
“After 2024, annual (end-of-period) inflation is expected to decline gradually from around 150 percent this year to single digits over the next five years, supported by continued restrictive policies and a recovery in money demand from historically low levels,” the agency indicates.
Source: Clarin
