Advisors begin to warn July inflation could approach 8%

The evolution of domestic prices, influenced by the vortex of the last few days following the change of the Minister of Economy and the rise in the dollar, has not yet been measured by economists. However, everything leads them to foresee it inflation would have risen – in this month – much more than expected.

Some analysts, especially critics of the official economic program, risk it the increase could reach 8% . This is the case of the director of MacroView, Eduardo Santangelo, who underlined – in radio statements – that July inflation “could be the highest rate of the year” and estimated it between 7 and 8%. The economist Luciano Laspina also tweeted it last Monday could reach 10%.

However, for other experts, giving a number to the price change at this time of the month is “risky”, they acknowledge.

Aldo Abram executive director of the Fundación Libertad y Progreso recalled: “The fact that June (5.5% according to this measure) shows higher inflation than May, confirms that there has been no slowdown as the government wanted to demonstrate. But keep accelerating. We will see it in July, it will certainly be higher than June, especially in the last few weeks, when the uncertainty has made people stand out in advance, take care of the goods they have because they don’t know if they can replace it, “he said.

“He also made the public rush to get rid of the pesos, buying what they needed with their salary or bonus. “With all of this, what happens is that purchasing power decreases much more than what the Central Bank was already causing with the huge problem it is creating.”Giving inflation a number is daringyou have to look to the rest of the month, but clearly we are going towards 8% if the Government and the BC continue to do as they have been up to now, ”the analyst said.

In this sense, a recent report by the IERAL Foundation highlighted the need to do so “go back to the macro“. This requires, according to this view,” in addition to the political support of the ruling party, urgent measures, essentially on the side of public spending, to stop this deterioration in expectations, and its effect on rate inflation, the currency gap , reserves and real variables “, warned the foundation.

From Eco Go, economist Sebastián Menescaldi commented that the consultant is carrying out the analysis of price monitoring due to the situation. “For now, what we see is that the food is relatively calm, but clear there are jumps in import prices. This will have a negative impact on prices for the month, where we see an acceleration compared to the 5.4% we recorded last June “, advancement. “This acceleration is cushioned by a lower price effect of regulated products,” she clarified.

The analyst’s judgment is that “in general, the increase is linked not so much to the ministerial change, but because companies are beginning to understand better the effects of the BCRA’s measures the other Monday (import restriction) on their performance in the next semester: To the extent that the systems have worked again, companies could see the purchasing power they have in the second half. Paradoxically, the ones that fare worst will be the companies that grew the most in the first half of the year, “she said.

Guido Lorenzo, head of the consultancy firm LCG, said that in terms of inflation in June at 5.5% according to his estimate, he sees no slowdown. “If you add the price increase due to the instability of this week, may be a value greater than that. Driven not only by markups, but by a higher exchange rate. I don’t know how far it can go, but it can be assumed that it’s a record higher than even this year’s highest, close to 7%, “he said.

A similar opinion is given by Lorenzo Sigaut Gravina, of Equilibra. “We have seen that July started with 6%, in principle because it is a seasonal month. But the most complex thing is the uncertainty due to replacement costs plus the situation of having spent 30 hours without the Minister of Economy. With all this, the market’s reception of all these changes has become more acute. Expectations were unanchored and he can estimate the companies that have come out on cover this inflation process reaches 7%Even if we don’t have definitive data, the feeling is that it may be on the levels of the March peak (6.7%), or between 6 and 7%, “he said.

In addition to the ingredients that have recently strengthened inflationary expectations in Argentina, the rise in prices at the local level is framed in a complicated world context, in which the Russian-Ukrainian war is triggering inflation in many countries – especially in the food and energy sector – pending a global recession.