October inflation was 2.7%, the lowest in almost three years: it rose 193% over the past 12 months

National Institute of Statistics and Census (Index) pointed out that inflation october remained at 2.7%Which means a new recession in the consumer price index Regarding 3.5% registered in SeptemberThus, price rise According to the official body, the accumulation reached 193% in the last twelve months. This inter-annual figure is the sixth consecutive decline from 289.3% recorded last April.

This new data reinforces the softening trend in price growth that the government is looking to consolidate through a series of economic policy measures. The economy ministry team had estimated that the October figure would be one of the lowest in almost three years, supported by the context of lower inflation pressures in some key sectors, such as Eat And regulated services,

Core inflation, which excludes seasonal and regulated prices, was 2.9%, down from 3.3% in October. In this way, this was the lowest record after September 2020. Once again a difference in prices was seen. Goods (2.1%)

And Services (4.3%)Where once again the latter rose above the general average.

The division with the highest growth in this month was Housing, water, electricity, gas and other fuels (5.4%) Due to increase in housing rent and related expenses; electricity, gas and other fuels; and water supply, after Clothing and footwear (4.4%)At the other end, the two divisions that recorded the smallest changes in October 2024 were Transportation (1.2%) And Food and non-alcohol beverages (1.2%).

The first signs of this slowdown were already seen in partial measures of interior cities such as the city of Buenos Aires and Bahía Blanca, where monthly inflation in October registered a decline compared to September. For example, in the city of Buenos Aires the index fell to 3.2% from 4% the previous month. This softening of Buenos Aires inflation was mainly due to lower growth in food and non-alcohol beverages as well as accommodation-related services.

There could be many reasons for the decline in monthly inflation rate. First, the government has focused its attention on controlling nominal gradual adjustment of the official exchange rateDue to which the pressure on internal prices has been reduced. Since the December devaluation, the pace of adjustment of A 2% monthly rate was set on the dollarWhich has become a major basis for reducing inflationary expectations.

Additionally, the Central Bank decided in late October reduce interest rates

40% to 35% annual nominal reference, the first decline in six months. The measure, which seeks to stimulate economic activity without rampant inflation, was interpreted by analysts as A sign of confidence that the price recession is sustainable.According to Market Expectations Survey (REM) estimates, monthly inflation may remain around 3% in the coming months, with additional decline likely to begin in April next year.

In October, the index was buoyed by growth in some sectors such as insurance and financial services, clothing and footwear, and restaurants and hotels. However, other commodities, such as food and beverages, recorded more moderate growth, which contributed to the slowdown in the general price level. According to private consulting firms, this pattern will continue in November, although expected growth in regulated services and some seasonal prices may lead to a modest increase in the coming months.

High-frequency data monitored by the Commerce Ministry had already estimated a decline in core inflation, which excludes the most volatile components such as fresh food and regulated services. Food improved slightly in the first week of November, but is still below the monthly average of previous months, according to estimates from consulting firms like Ecogo and Equilibra.

Looking at the future, the government faces a challenge Maintain this bearish trend without affecting the economic recoveryTo. One of the tools that could be used in the coming months is a reduction in the pace of adjustment of the official exchange rate, seeking this mechanism to continue to deflate inflation expectations.

Furthermore, it is expected that INDEX will soon implement an updated price index, which will include a greater weighting of services in its weighting, which will better reflect current household consumption. This amendment may affect the measurement of inflation, although the organization has indicated that technical tests are still being conducted and there is no official date for its implementation.

Meanwhile, monetary policy focuses on encouraging savings in pesos and maintaining positive real interest rates to avoid additional pressure on the exchange market. However, some economists warn that, although the slowdown in monthly inflation is positive, the general price level remains extremely high, with year-on-year inflation exceeding 200%, which affects the purchasing power of the population.