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January inflation continues to show signs of deceleration, especially in food - Infobae
Source:
www.infobae.com
January 23, 2024
FILE PHOTO: A woman shops in a supermarket as rising inflation hits consumer prices. REUTERS
The inflation data for the third week of the month carried out by private measurements accentuated the trend that has already been observed since the beginning of the year: there are clear signs of a slowdown in price increases and it would be practically a fact that the index will be well positioned below the peak of 25.5% in December.
One of the consulting firms that has already provided data that includes what happened last week is Econometrica. Ramiro Castiñeira's consulting firm estimated an increase of 3.1% in food and beverages. For the last four weeks, the behavior of this specific item showed an increase of 13.9%, well below the almost 31% that had been shown in the first week of January.
With these numbers, the projections for January inflation show just over 20%, but 10 points correspond to what December leaves behind.
OJF & Asociados calculated in the same sense. The consulting firm run by Fausto Spotorno showed an increase of only 1.4% for the estimate for the third week of the month, accumulating 15.4% in three weeks. Likewise, they calculate that the monthly index would ultimately be close to 20%. “It was the lowest weekly figure in four months,” said the economist. For reference, inflation in the first week of December had reached 10%.
In the case of Eco Go, whose director is Marina Dal Poggetto, they estimated a much greater increase in food and beverages, around 3.8% in the third week, although the variation of the last four weeks also shows the same phenomenon of deceleration of prices, since it showed 15.7%.
For inflation throughout January, Eco Go estimates that it could be close to 22.5%, that is, one step above what was calculated by OJF and Econometrica, but below December.
According to Castiñeira, one of the main explanations for the inflationary slowdown, especially in food, has to do with the decision of the economic team to iron the official dollar, allowing an adjustment of only 2% monthly. Of course, as he himself mentions, the cost of the measure was the increase in the exchange gap to 50%, after having fallen to less than 20% at the end of 2023.
Investor expectations, as emerging from dollar futures on Rofex, indicate that an acceleration of the exchange rate adjustment is expected, but only in March and of the order of 10%. This means that at least next month the current policy of keeping the exchange rate in the “freezer” would be maintained.
Between the decision to leave the official dollar practically unchanged and the drop in sales due to the reduction in purchasing power, everything suggests that February inflation could collapse even faster.
There are, however, several dangers to sustaining this inflationary reduction after the strong peak in December. Firstly, because strong fare adjustments are coming, starting with the transportation ticket, which would go to 270 pesos. But the first increase in electricity rates is also planned, with the aim of reducing subsidies. February has low seasonality and that could help inflation return to the cruising level of Sergio Massa's last stretch, that is, between 12% and 13%. March is already more complex, because there are some factors that generally push prices up: start of classes, change of season in clothing, Easter and possibly an exchange rate adjustment that would make a greater jump.
Source:
La inflación de enero continúa dando señales de desaceleración, en especial en los alimentos
El índice podría ubicarse cerca de 20% según estiman distintas consultoras, es decir 5 puntos por debajo de diciembre. El dólar oficial planchado y la caída del consumo son algunos de los factores que explican los menores aumentos
www.infobae.com
January 23, 2024
FILE PHOTO: A woman shops in a supermarket as rising inflation hits consumer prices. REUTERS
The inflation data for the third week of the month carried out by private measurements accentuated the trend that has already been observed since the beginning of the year: there are clear signs of a slowdown in price increases and it would be practically a fact that the index will be well positioned below the peak of 25.5% in December.
One of the consulting firms that has already provided data that includes what happened last week is Econometrica. Ramiro Castiñeira's consulting firm estimated an increase of 3.1% in food and beverages. For the last four weeks, the behavior of this specific item showed an increase of 13.9%, well below the almost 31% that had been shown in the first week of January.
With these numbers, the projections for January inflation show just over 20%, but 10 points correspond to what December leaves behind.
OJF & Asociados calculated in the same sense. The consulting firm run by Fausto Spotorno showed an increase of only 1.4% for the estimate for the third week of the month, accumulating 15.4% in three weeks. Likewise, they calculate that the monthly index would ultimately be close to 20%. “It was the lowest weekly figure in four months,” said the economist. For reference, inflation in the first week of December had reached 10%.
In the case of Eco Go, whose director is Marina Dal Poggetto, they estimated a much greater increase in food and beverages, around 3.8% in the third week, although the variation of the last four weeks also shows the same phenomenon of deceleration of prices, since it showed 15.7%.
For inflation throughout January, Eco Go estimates that it could be close to 22.5%, that is, one step above what was calculated by OJF and Econometrica, but below December.
According to Castiñeira, one of the main explanations for the inflationary slowdown, especially in food, has to do with the decision of the economic team to iron the official dollar, allowing an adjustment of only 2% monthly. Of course, as he himself mentions, the cost of the measure was the increase in the exchange gap to 50%, after having fallen to less than 20% at the end of 2023.
Investor expectations, as emerging from dollar futures on Rofex, indicate that an acceleration of the exchange rate adjustment is expected, but only in March and of the order of 10%. This means that at least next month the current policy of keeping the exchange rate in the “freezer” would be maintained.
Between the decision to leave the official dollar practically unchanged and the drop in sales due to the reduction in purchasing power, everything suggests that February inflation could collapse even faster.
There are, however, several dangers to sustaining this inflationary reduction after the strong peak in December. Firstly, because strong fare adjustments are coming, starting with the transportation ticket, which would go to 270 pesos. But the first increase in electricity rates is also planned, with the aim of reducing subsidies. February has low seasonality and that could help inflation return to the cruising level of Sergio Massa's last stretch, that is, between 12% and 13%. March is already more complex, because there are some factors that generally push prices up: start of classes, change of season in clothing, Easter and possibly an exchange rate adjustment that would make a greater jump.
