The government is unable to stop inflation, which remains high: in August it was 7%

Inflation in August was 7.0%, according to the consumer price index (CPI) published Wednesday by the National Institute of Statistics and Census (INDEC). Therefore, so far this year it has accumulated an increase 56.4% and of 78.5% in one year.

In this way, the CPI showed a decline compared to July, when the increase reached 7.4%, the highest in the last 20 years. However, last month’s record shows that the index is already building up six months above 5% monthly.

And that the Government, with changes to the Council of Ministers -and the emblematic entry of Serge Massa as Minister of Economy – and a so-called “war” launched by Alberto Fernández cannot descend the spiral.

The forecasts, according to various economists, indicated an increase between 6% and 6.5%outlining a floor of 100% by the end of 2022.

This month, specialists had predicted the increase driven by the 40% increase. buses and trains in the AMBA, to which the cycle of price updates in prepaid (11.3%) e expenses (8% on average).

According to data released today by the statistical agency, the items that pushed the price needle the most were clothing, with an average increase of 9.9%, housing equipment (8.4%) and other goods and services (8.7%). Food and beverages, which account for between 25 and 30% of the indicator, increased by an average of 7.1%, once again exceeding the overall CPI. The trend is also reflected on an annual basis as, while inflation rises to 78.5%, food prices have increased by 80%.

Within this division, the increase in vegetables, tubers and legumes stood out; Sugar, sweets, chocolate and treats. Fruits were also more expensive; Oils, fats and lard; and dairy products and eggs.

At the category level, seasonal products increased by 8.7%, led by clothing and footwear, on the one hand. And also for Fruits, Vegetables, Tubers and Legumes. Followed by the Core CPI, the one that excludes seasonal increases (6.8%) and the Regulated one, which grew by 6.3% in the month.

As for the inflationary impact on consumers’ purchasing power, this is demonstrated by the August data real wages show an inter-year decline of 8.9% and a monthly decline of 4.4%.

Taking food, the monthly drop in real wages is 5.7% (-12.3% yoy). Since Alberto Fernández took office, taking the general level of the CPI, real wages have accumulated a 10.5% decline; and taking the item Food, the drop in real wages accumulates 15.8%, according to the Center for Economic Studies Argentina XXI (CEEAXXI)

2022 with 100% inflation.

Prior to the August CPI release, market analysts who passed their forecasts to the Central Bank reported that they expect inflation to hit 100% this year. Who best predicts this variable for the short term (TOP-10) expect an average inflation of 99.4% in the inter-year change, ie 4.7 points more than in the July survey.

Additionally, participants in the Survey of Market Expectations (REM) revised inflation forecasts for next year and placed it at 84.1% year-over-year. (7.6 points more than the previous REM). Meanwhile, for 2024 they estimate it at 63.1% (3.1 points more than in the previous survey).

DS