Inflation in July is close to 8% and would be the highest in the last 20 years

The consultants who calculate inflation are adjusting their projections for this month week after week. A few days before the end of July, several economists already are see the index closer to 8% than 7% which was expected earlier this month, when the resignation of Martín Guzmán triggered a new jump in the blue dollar.

LCG, the consulting firm headed by Guido Lorenzo, sees the figure at around 8%. “Maybe we will see double-digit monthly inflation sooner than expected”they warn.

In the LCG survey, in the third week of July, the rise in food prices averaged 2.1% and accelerated by 0.61 percentage points from the previous week.

“The food and beverage index showed monthly inflation of 5.8% on average in the last 4 weeks and of 6.7% point-to-point in the same period,” they specify.

The Liberty and Progress Foundation until last week measured a price increase of 7.5%. For his part, Camilo Tiscornia, of the consulting firm C&T, predicts inflation for this month of “between 7 and 8% “.

The EcoGo consultancy is the one with the lowest inflation estimate: They expect an increase of 6.5%. “There are things that have increased a bit, but on average for the month it hits less. There is a lot of increase in imports and toiletries, but less food has a greater weight,” explained Sebastián Menescaldi, Deputy Director of Consulting. For the Food item, the projection they manage is 5.9%.

This is underlined by a report by the consultancy firm Focus Market the increase in prices in the month reached 9.5% in some categories of basic consumption.

Among the segments with the greatest increases are Hygiene with 9.5%; Base Basket with 6.5%; Hair care with 6.5%; Alcoholic beverages with 5.7%; Home and car care with 5.5% and dairy products with 5.3%.

With these inflation estimates the July record would be the highest since April 2002, when it reached 10.4%.

New record?

So far, the highest consumer price index (CPI) of this year, and of the entire administration of Alberto Fernández, had been that of March of this year, when it reached 6.7%. After falling to 6% and 5.1% respectively in April and May, the index rose to 5.3% in June, driven by the instability of the currency market which began to intensify in the second week of June.

This has led the market forecasts for this year and the next to be on the rise. According to the Central Bank’s (REM) survey, this year inflation would be 76.7%, in 2023 it would be 66% and by 2024 it is expected to be 55.7%.

“The maintenance of the monthly inflationary level is not only a sign of a lack of coordination and results in terms of economic policy, but also exposes the need for more management space that can only generate an agreement on the management trend. This comes as something distant when you notice the diversity of opinion in the political space of the government, “he said
Martín Calveira Research Assistant, IAE Business School.

“The situation in Argentina is very worrying”. The reflection was made by the economist of the International Monetary Fund, Pierre-Olivier Gourinchas, at the press conference after the presentation of the latest world projections. “The most important issue in Argentina at the moment is unanchored inflation,” he said. And he added: “Lowering inflation must be a top priority”.

AQ