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In April, consumption registered a 35% drop in Buenos Aires territory, with a special impact on the suburbs - Infobae
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En abril, el consumo registró una caída del 35% en territorio bonaerense, con especial impacto en el conurbano
Así lo asegura un estudio realizado por el Banco Provincia. Las bajas más fuertes se produjeron en combustibles, supermercados y compras digitales
www.infobae.com
May 24, 2024
This is confirmed by a study carried out by Banco Provincia. The sharpest declines occurred in fuel, supermarkets and digital purchases
In April, the Banco Provincia de Consumo Index (IBP), an indicator of consumer spending per customer with credit and debit cards and the Digital Wallet DNI Account, showed an abrupt drop of 35% year-on-year. “The reduction in consumption was similar to that observed in times of pandemic. Until this month, the reduction in these expenses took the form of a slowdown in growth but, in April, the result jumped into negative territory,” the report noted.
The impact was greater in the Conurbano: while in the interior of the Province the retraction reached 30%, in the Metropolitan Region of Buenos Aires (RMBA) it reached 38.3%. In this area, the most pronounced drop was in the southern zone, with 43.4%. This was followed by consumption in the Autonomous City of Buenos Aires with drops of around 42.3% and the western zone, where the drop reached 40%.
According to the survey by the consulting firms, the report noted, “this significant contraction was due to salaries with little purchasing power, the incipient deterioration of social conditions (rising poverty and everything that entails) and firms that try to avoid incorporating fragility to their balance sheets by lowering prices, in a context of increases in fixed production costs that are impossible to absorb through subdued business volumes.”
The biggest fall of the series
In the fourth month of 2024, the IBP consumption recorded the most significant drop in its entire historical series (-35.3% yoy), despite the smaller increase in consumer prices reported by Indec. The decrease in consumption was basically due to the 10.8% yoy contraction of the amounts consumed measured in constant values.
For the purposes of understanding its magnitude, this setback was similar to those observed during the pandemic. This also took place in a context in which, through slowdown (as shown by the green dotted line), the customer base increased by 38%.
Items and the impact of inflation
If the evolution of the index is analyzed between April and March 2024, it is observed that the most affected item was digital purchases, with a reduction of 55%. However, the most relevant data is the contraction evident in supermarkets and food , which was 21%, showing an acceleration of the decline compared to the previous month. Finally, the 18% decrease in fuels was also significant .
In the opposite direction, the general price level measured by Indec rose almost 110% between December and April, exerting significant pressure on the population's income. The different baskets grew at different rates: Food and non-alcoholic beverages advanced 104.7%; Public services 143.9%; and Private services did so below the general level (contains restaurants and hotels, recreation and culture, education, among others).
In summary, the prices of basic services (electricity, gas and water) and food rose well above other goods and services, typically second needs or more dispensable.
According to the team of economists at Banco Provincia, the current inflationary process has a greater impact on private consumption than previous inflationary accelerations. The reasons are multiple: contractionary fiscal and exchange policies, fall in purchasing power, greater increase in prices of “inelastic” goods with respect to those whose consumption can be substituted, such as gastronomy, tourism, culture and recreational outings.
As a result, the deterioration in demand is greater than in other inflationary accelerations, not only for macro reasons, but also for micro reasons: the difficulty of stopping substituting the goods and services that are leading the increases.
The Index, generated by the Economic Studies team of Banco Provincia, surveys the consumption carried out both in Buenos Aires territory and in the Autonomous City of Buenos Aires . The survey includes information on the movements of 1.2 million credit cards and 2.6 million debit cards. In addition, it analyzes the transactions of the more than 9 million users of the DNI Account digital wallet. It is adjusted for inflation according to the Indec CPI.
