The consumer price index was 11% in March, with core inflation at 9.4%, It paves the way for April to become the single-digit registration month.
In the Central Bank’s survey of market expectations, consultancies, which had marked 12.5% in March, expected 10.8% in April and 9% in May.
But in light of the latest INDEC report, some analysts are starting to revise their projections and They see a possibility of it reaching single digits in April.
With the dollar as its anchor, inflation has fallen month after month since January. But April’s big utility increases threaten to disrupt that trend. Gas increases they fluctuate between 250% and 500% across the entire national territory. In the case of electricity the increases vary between 120% and 300%.
However, the slowdown in the food sector could offset the increase in tariffs. Food increased 10.5% in March, compared to 11.9% in February. And this downward trend would deepen in April.
From the Libertad y Progreso Foundation, the survey for the first week of April showed that the retail price index grew by 10.2% monthly. “Based on this data, we expect April to close a monthly increase of 9.5%; even when faced with the impact of rising rates. This is because the impact of the regulated price update is offset by a sharp slowdown in unregulated prices, which were already running at a single-digit monthly rate in March and could increase by around 6%-7% in April,” underlined Eugenio Marí, Chief Economist of the Foundation.
Data from the retail price survey conducted by consultancy C&T for the GBA region shows “a strong impact of adjustments in gas and water services but a significant moderation in the vast majority of other items, including food and drink, which are fundamental for core inflation. Total inflation for the month could reach single digits“, they anticipate.
According to the measurement of the consultancy firm EcoGo, the food price survey showed an inflation of 0.4% in the first week of April, 0.4 percentage points less than the previous week.
The same trend was recorded by the consultancy firm LCG, which compiled its food price index recorded 0.4% in the first week of April and 0.2% in the second. This is the lowest weekly index in the last 9 months.
“April began to mark a new slowdown in the LCG food price survey, racking up inflation of 0.6% in two weeks. In April, seasonality usually works in favoron which, furthermore, the BCRA continues with a 2% decline in the official exchange rate,” says LCG.
“In this weekly survey, food inflation had averaged 11-12% monthly, but collapsed to June 2023 values (6.2% on average in the second week of April). The percentage of products increasing remains high (25%). “We have to wait to see the effects of the second round of regulated increases and the gas increase that will be felt later in the month”they warn.
For the Economic Studies Center of Bahía Blanca in the first week of April The food and beverage category recorded a change of 2%. Compared to the previous week, the products that increased the most were potatoes with 18.5%, water with 10.3% and rice with 10.1%. At the same time, there were declines of 5% in oranges, 6% in coffee and 6.9% in butter.
According to the Econviews price survey, which measures the basket of groceries, cleaning and perfumery in supermarkets, The month started with a weekly change of 0.8%. In the first week of March the increase was 2.2%.
Economist Fernando Marull, director of consultancy firm FMyA, has called it quits for March inflation of 12.1%with the food sector closer to 10%.
“April would be the last month of large tariff increases, as gas increases of around 350% on average for residential areas have finally been confirmed. This would contribute almost 2 points to overall inflation, which we expect to be 11% monthly. In the specific case of the food sector, it will continue to be less than 10%,” says Marull.
Decline in consumption
The food brake is in tune with the collapse in consumption. According to CAME data for March, retail sales decreased by 12.6% annually compared to the same month last year, at constant prices, and accumulated a decline of 22.1% in the first quarter of the year. In the monthly comparison they decreased by 3.2%.
Food sales fell 15.5% annually in Marchat constant prices and accumulate a decline of 28.7% in the first three months of the year, compared to the same period of 2023. In the month-on-month comparison they decreased by 2.7%.
Source: Clarin
