Argentine inflation in August could confirm a downward trend, economists estimate

In the final stretch of August, inflation for the month may be slightly below the 4% recorded in July. Five out of six surveys predict an index below this number, which would mark a new level for the Consumer Price Index (CPI).

Of the economic consultancies in Buenos Aires that carry out their own measurements, EcoGo is so far the only one that predicts inflation above the July level. Marina Dal Poggetto’s consultancy estimates 4.2% for this month.

The projections of other economists interviewed by Clarín range from 3.5% to 3.8%. If they materialize, it would be the lowest inflation of the year and the lowest since November 2021, which was 2.5%.

August’s record is being marked by the drop in consumption that puts a cap on the prices of mass consumption products and by increases in some categories of services, such as tolls, bus tickets, medical insurance prices and electricity and gas tariffs.

EcoGo’s Retail Price Survey showed a 1% change in food in the third week of August 2024. This brings the general projection for August to 4.2%. “The variation compared to the previous week responds to a slightly higher than expected increase in food and beverages.”

“Inflation this month was a little more complicated than expected. In the food sector, the month started with a strong increase, which could have been seasonal, but in the third week the trend of increases above 1% weekly did not decrease, and the average is 3.4% monthly. Core inflation between May and July was stable at levels of 3.7%/3.8%, and does not appear to decrease much in August. With a core of 3.5% and Regulated at 5%, we raised the inflation projection for August to 3.8% and we do not rule out the possibility of it reaching 4%”, says consultancy firm FMyA.

Econometrica’s projection for the month of August is that monthly inflation would be 3.6%, with the food and beverage category growing 3.0% per month. “Zero deficit and zero emissions are consolidating the collapse of the inflation rate”, says the consultancy firm Ramiro Castiñeira, one of President Javier Milei’s economic advisors.

For Equilibra, a consultancy by economist Martín Rapetti, weekly inflation was 0.3% and the average for the last four weeks fell to 3.0%. “We estimate that monthly inflation in August will close at around 3.5%.”

For Alberto Cavallo, son of former Economy Minister Domingo Cavallo, “Argentina’s monthly inflation rose from 2.8% to 3.2% in the first twenty days of August, according to PriceStats estimates. The trend remains stable at around 3%. There is no evidence of a slowdown in the last week.”

The Econviews price survey points to an increase of 1.1% in the third week of August for a basket of food, perfumery and cleaning products. This week, the highlights were the increases in fruit and vegetables (2.5%) and beverages (2.9%).

For LCG, with data from Wednesday, August 21, the third week of the month closed with a 0.3% increase in food and beverage prices. This implies an acceleration of 0.4 percentage points compared to the previous week, which had presented deflation of 0.1%.

Therefore, “the average monthly increase is 2.1% while the peak-to-peak measurement in the same period remains constant at 2%”.

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