Inflation has slowed but remains at very high values. Prices increased 8.8 percent in April

In April, Inflation stood at 8.8 percentAccording to INDEX. Although this is a value that is still much higher than the price dynamics of recent years, it also consolidates Recession from peak of 25.5 percent That was touched in December amid a strong devaluation of the currency and regulatory shocks imposed by the Meili government. Since the beginning of the Liberal administration, inflation has accumulated 106.9 percent.

Immediately, the economic team led by Luis Caputo sold the data as a major win for the government. “National CPI exhibits first single-digit monthly variation since October 2023. Core inflation, which excludes adjusted and seasonal components of the index, was 6.3 percent. This was the lowest figure since January 2023,” the Economy Ministry statement indicated.

There are many ideas that deserve celebration. First of all, it is still very high inflation. For example, During the government of Alberto Fernández, this number was exceeded only in August, September and November last year. Never in the Macri government, much less in the CFK government, was this much value verified. In other words, there is still a long way to go before we can talk about a low inflation situation.

On the other hand, The current deflation process takes place in a scenario that may not be sustainable for several reasons. is the first Amplitude of decline in consumption and the economy in general due to a decline in wages and a slowdown in public spending. The government itself will have to see how it reverses this dynamic if it wants a good electoral performance next year. Second, there is huge exchange rate uncertainty, because Argentina becomes an expensive country in dollar terms And BCRA supports purchase of reserves only on the basis of severe recession and delay in payment for imports. If the government devalues, it will face a new rise in inflation

the figure

With 8.8 percent inflation rate in April Year-on-year comparison shows inflation at 289.4 percent And 65 percent compared to December. The division with the highest growth in the month was housing, water, electricity, gas and other fuels, with 35.6 percent, due to
Increase in rates of gas, water and electricity. At this point, it is worth clarifying that there is still a significant increase in electricity and gas bills, which the government has postponed so that inflation does not increase further.

then items Communications (14.2 percent), due to growth in telephone and Internet services; And clothes and shoes (9.6 percent) due to seasonal changes. in the matter of Health, Increasing It was again 9.1 percent above average due to increases in prepaid bills and prescription drugs.

such as in a highly sensitive area Food & Beverage It grew by 5.7 percent, a historically high value but still well below average. separation shows that bread and cereals improved by 5.2 percent in line with meat and derivatives (4.9). up they went milk and dairy (8.4) and Vegetables, tubers and beans (14.3 percent). In the lower range, oils, fats and butter appear (4.1) and 2.9 percent decrease in fruits,

At product level, last month 16.5 percent increase in cream cheese, 12.5 percent butter; 10.5 percent ordinary wine and 10.8 percent still water. At the same time, Prices of important domestic food products declined several times.Such as white rice (-0.9 percent), wheat flour (-0.2 percent) and sunflower oil (-0.3 percent).

what’s coming

Regarding what could happen with inflation during the current month, CEPA warned that in food and beverages “In the first two weeks, mass consumption products increased by 4.0 percent compared to the same period last month. “April has seen a 7.5 percent increase in meat cuts compared to the average for the month of April.”

Other than this, Among regulated services, the government decided to postpone the hike in electricity and gas till June, while increases in prepaid bills were limited and the application of the fuel tax was delayed, although their price increased by 4.0 percent as an adjustment for devaluation. “In June, not only the 4.4 percent adjustment of the deferred fuel tax should be implemented, but also the corresponding update for the first quarter of 2024, which Nearly 20 percent new increase in gasoline will affect” CEPA says. There has also been strong growth in communications and transportation.