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2024-04-17 05:46:08
High-frequency surveys conducted by private consulting companies show that the data is from the first half of April monthly inflation finished slightly below double digitsdespite the impact of increased i public services and with the help of constant slowing i foods.
The fiscal adjustment program carried out by the Javier Mileywithin the framework of the fall in activity and purchasing power, which brings the Government closer to breaking through a barrier after five months of retail prices crossing single digits. he International Monetary Fund (IMF) This process was highlighted next Tuesday.
Economist Go, Rocio Bisang, said the consulting firm recorded food inflation of 0.2% in the second week of April, the lowest rate it has measured since the pandemic, and forecast the item to end at 6% monthly. Their estimate of the general index came in at 8.9% for the period.
“The downward trend would continue until the end of the year. The margin for how much the cut can be made will depend on two things: on the one hand, how the street is managed, in the sense that controllability and expenditure adjustment can be maintained, in the context of a strong recession as it will be. different sectors exerting pressure; and on the other hand, how to proceed, especially what will happen to the exchange rate that today contributes to stability and is linked to that, to the stocks, in a scheme that is maintained today thanks to that,” said Bisang.
The price survey carried out by the Freedom and Progress Foundation (LyP) a monthly CPI increase of 9.5% was recorded in the first half of April, 1.1 points below the 10.6% at the end of March. Compared to the Indec indicator for the third month of the Indec (11%), the deceleration is 1.5 percentage points.
“In the second week of April the change was 0.4% per week, the lowest record for 6 months. You have to go back to October 2023 to get a similar increase. In this way, we estimate the increase in the CPI LyP in April to be equal to 9%, which is the first single-digit change since October 2023,” they predicted.
Lautaro Moschet, economist at LyP, warned: “The slowdown in food prices is encouraging, given that it accounts for a large part of household costs and almost a quarter of the CPI. In the first half of April, they rose by an average of 2.5%, while at the same time in March they rose by 6.3%. On the contrary, the biggest impact on the pocketbook continues to come from the regulated sector, which is recovering from the brutal distortion and freeze it has suffered in recent years. This month the impact of the gas rate updates will depend on prepaid, and to a lesser extent, communication and education services.”
The truth is that the main contribution to inflation in April could come from price adjustments on public and other regulated services. From the consulting firm Equilibra they indicated that the increases in telephone and internet, cigarettes, gasoline, gas, electricity and water will add 6.4 points to the CPI for the month. The increases announced for the coming months will add up to at least 14 points in the second quarter, as long as the BCRA does not decide to accelerate the sliding rate of the official dollar due to the delay in the exchange rate.
“Inflation peaked in December (25.5%) and has since declined sharply: March closed at 11%, and During the first two weeks of April prices ran at a monthly rate of 9.4%.. Despite the delay, it is worth noting that i) the realignment of relative prices is not over yet: some items need to be corrected – eg. public services-, and a “second round” of adjustments should not be ruled out, and ii) the strong slowdown in the TCR can lead to a new discrete jump – or an acceleration of the crawling-”, highlighted Invecq.
Javier Milei’s economic team knows that honesty is not the end, a process that will be reflected in official statistics and in the pockets of consumers. Included in that process was the Government’s dispute with the prepaid companies because of the “blow to the middle class”.
That is the reason why Central Bank of the Republic of Argentina (BCRA) They consider that from this month the path of the “IPC Nucleo” from the Indec, which does not take into account rate adjustments, regulated and other seasonal ones. In March that measure showed 9.4%, the digit was broken for the first time since October and partly prompted the lowering of interest rates announced by the entity last week.
The general index for March was marked 11%, the lowest evolution in five months, accumulated 51.6% in 2024 and 288% year on year, at the highest levels for thirty years. The evolution of other retail prices in the next two weeks will be crucial to know whether general inflation will return to single digits. The Government’s economic team is not yet ready to claim victory, although the private sector has some hope.
The IMF, for its part, kept the projections regarding recession and inflation for the Argentine economy this year, days before a new chapter in the round trip between the Casa Rosada and the organization that will take place in Washington. There is a report from World Economic Outlook (WEO)released today, argued that the country’s GDP will fall by 2.8% and the accumulated price increase will be 150%, with the expectation of a marked recovery and a strong slowdown in inflation by 2025. Unemployment would jump to 8% of the active population economic. .
The organization’s chief economist, Pierre Olivier Gourinchashe said at a press conference where the report was released World Economic Outlook (WEO)according to the English capitals) that, “in Argentina the authorities are implementing a very ambitious stabilization plan to restore macroeconomic stability.”
“As you know, the plan focuses on a strong fiscal anchor that eliminates, in particular, any government funding from the Central Bank, which was one of the factors that caused very high inflation figures in previous years. And that is already showing its effects. “We see this sharp drop in inflation month after month,” he said.
“That’s why the progress so far is very impressive. The authorities were able to record a fiscal surplus for the first time in over a decade. And of course, this will take some time and will require strong political enforcement. There is much more to be done, and much more to be done on a wider scale,” he said.
“So I think we’re watching this situation very closely. Our teams here at the Treasury are in close contact with the authorities. But progress, again, is quite significant. Now, whether it is V, U or L, we agree that we prefer V, to U or L,” he explained about the speed of the country’s recovery.
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