President Javier Milei noted on Tuesday that inflation is falling sharply and estimated that, in March, the retail price index will show a single-digit increase. The idea of this decline – albeit to a lesser extent – is also reflected in the the perception that people have, in the short and medium term, according to a private survey.
From a survey by the University of Tella – carried out from 4 to 13 March – it emerged that the population expects this month that the Index Next year’s consumer price index (CPI) will accumulate an increase of 123.8% while in February the expectation was 170.8%.
The survey collects information at an individual level about the expectation that each person has of the general increase in prices in the next 12 months (expected annual inflation). And since May 2023 it has incorporated a new question about monthly inflation forecast for the next 30 days.
According to analysts at the University, this question has a higher response rate than annual inflation, which suggests that in a context of high uncertainty it is probably easier for the person to answer what he thinks will happen in a month.
The monthly average expected inflation went from 19.08% in February to 15.46% in March, according to the investigation. “We found that people have less dispersion of opinion in monthly inflation than in annual inflation.
Regions and socioeconomic levels
Expected inflation decreases in all regions of the country. The sampling is representative of three regions: the city of Buenos Aires (Capital), the suburbs of Buenos Aires (GBA) and the rest of the country (Interior). “This month we observe the values of expected inflation decrease considerably in CABA and GBA compared to those recorded last February”, explains the Di Tella report.
“The expected inflation for the next 12 months in GBA is 140.7%, 61.1 points lower than the February measurement of 201.8%. In CABA it is 148.2%, 66.3 points less than that reported in February, 214.5%. Internally, a significant drop is also observed compared to the February measurements, reporting a value of 111.2%, against 147.1%. Like the month last March, “We observed high standard deviations for all three regions, indicating large dispersion in respondents’ responses,” the report reads.
On the other hand, perceived average expected inflation by families decreases for both the lower and higher income sectors. In March there was a significant reduction in expected inflation among families with different levels of education (which also approximates the level of income), and a change in trend.
Unlike previous months, the values reported this month in the survey demonstrate this Individuals with a higher level of education have lower inflation expectations.
“Individuals with a lower level of education saw a drop in perception, going from 151.9% in February to 127.7% this month, while those with a higher level of education went from a value of 180, 5% in February to 122.2% in March,” the study concluded.
Source: Clarin
