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Inflation points downward in March, while Caputo postpones increases in public services - Infobae
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La inflación apunta a la baja en marzo, mientras Caputo aplaza los incrementos en los servicios públicos
Relevamientos privados mostraron una merma en la segunda semana del mes tras un fuerte salto inicial de los precios. La variación está por debajo de la de febrero. El dólar oficial y los precios regulados serán clave para la dinámica de los próximos meses
www.infobae.com
March 19, 2024
Private surveys showed a decline in the second week of the month after a strong initial jump in prices. The variation is below that of February. The official dollar and regulated prices will be key to the dynamics of the coming months
By Agustin Maza
Inflation maintains its slowing trend after the December peak. REUTERS/Agustin Marcarian
Inflation in March showed continuity in the deceleration process that it has maintained since the post- devaluation flash in December, according to private surveys on the evolution of prices in the first weeks of the month. The main increases were in education, electricity, prepaid and food and beverages , while consumption continues to fall.
In recent weeks, the Minister of Economy, Luis Caputo , activated meetings with companies, with his criticism of the “2x1” promotions , and made progress in opening up imports of basic basket products to sustain the disinflation process. He also postponed the increases in public services , gas and transportation of the AMBA , which are a key in the adjustment carried out by the Government.
The pace of “thawing” of these prices and the evolution of the official dollar will be key to the dynamics of the coming months.
Immediately, the survey by the consulting firm C&T Economic Advisors for Greater Buenos Aires showed that March, after a start with strong increases, especially in education, electricity and prepaid, there was a “strong” slowdown starting in the second week. The greatest decrease was noted in food and beverages and household products: equipment, tools, cleaning products and toiletries, among the most relevant.
“Thus, four-week inflation, which peaked at 18.5% at the end of February, is currently at 11.6%, with the four-week moving average around 15%. In turn, four-week core inflation is below 10% this week,” C&T detailed. With this evolution, they said, the Consumer Price Index (CPI) could get closer to 13% monthly than the 14% they initially anticipated.
For C&T, March inflation could be closer to 13% monthly than the 14% they initially anticipated.
As they highlighted, March is a month of high seasonal inflation due to the incidence of the increase in education before the start of classes, this year close to 40% monthly, to which is added the change of season for clothing. Added to this was the drag of the electricity rate increases that was decided in mid-February and the liberalization of the prepaid sector.
The most substantial slowdown was noted in food and beverages after a strong increase was recorded at the beginning of the month, mainly in baked goods, meat and beverages. This led to meetings with companies producing consumer goods and supermarkets, with the subsequent flexibility of imports for products in the basic basket.
In that sense, the measurement carried out by LCG in supermarkets showed an inflation of 3.3% in the second week of March and a slowdown of 0.3 points compared to the first. Both figures were below the levels that February had shown, with 6.9% accumulated in two weeks.
“In monthly terms, inflation stabilizes around 11.5%, both the average and the tip-to-tip measurement. The percentage of products surveyed with increases also remains stable but high at 32% of the total, implying that the total basket increases every 3.2 weeks,” added the consultant.
The Scalabrini Ortiz Center for Economic and Social Studies (Ceso) registered a variation of 1.4% in the second week of March, the lowest since the November runoff. Monthly inflation from February 12 to March 11 was 7.9%, with “expensive and dollar-linked products pulling down the average while food and beverages are still above 10 percent.”
Econometrica recorded a noticeable drop in inflation in the second week of March.
Food and beverage inflation measured by Econometrica also showed a slowdown: 1.5% in the second week versus 4.6% in the first. The four-week moving average in this survey was 10.3%, slightly above the 9.4% in the same period in February.
The variation of the CPI in February was 13.2%, which confirmed the deceleration trend after the 20.6% in January and the 25.5% left by the flash in December after the devaluation. The accumulated figure for the last year is 276% and places Argentina as the leader in the world inflation ranking.
It remains to be seen if the disinflation process continues in March or if the statistical agency registers a figure slightly higher than the previous month. From Invecq they projected before the postponement of some increases in services: “In March, inflation would accelerate slightly, reaching around 15%; in particular, due to the significant inertia still present, the correction of some regulated prices, and joint ventures that have been closing above 20% monthly.”
“In turn, inflation would remain in the 10-15% area during the coming months. The realignment of relative prices is far from over, and there is a risk that i) a 'second round' of adjustments will be necessary (if those who corrected return to 'misalignment'), and ii) that those still ahead will show resistance to the low Furthermore, if the current pace of crawling does not accelerate, the chances grow that the BCRA will have to make another discrete adjustment to the official exchange rate , which would undoubtedly put upward pressure on internal prices,” Invecq warned.
Econviews , by Miguel Kiguel , spoke in the same vein in its latest weekly report: “ The battle of the coming months is in service inflation .” In the GBA, gasoline and public transportation have already been rearranged to a level close to the end of 2019. The prepaid lag has been reduced considerably in the last three months. On the other hand, education continues to fall behind. It was reported that the government wants to postpone the increases in transportation and gas in the AMBA. After the first 100 days and the “honeymoon”, fiscal consolidation begins to conflict with the need to show faster results in terms of inflation.”
