Inflation in Argentina has no ceiling and in March rose to 104.3% year on year.

The rise in consumer prices in Argentina It doesn’t give a breather as it climbed to 104.3% year-on-year in March last year, up 1.8 percentage points from last February, the National Institute of Statistics and Census (Indec) reported this Friday.

In the third month of the year, consumer prices rose by 7.7% m/m, accelerating from 6.6% in February last year and exceeding private market expectations (7%) in the latest CBR survey.

“Inflationary processes tend to follow an exponential trend when there is no stabilization plan,” economist Diego Giacomini explained this Friday in his latest report, “especially if there is an election cycle between them, like the one that is approaching in Argentina”, citing the uncertainty caused by the presidential elections in October and ahead of the primaries in August.

The director of the consulting company Economía y Ética recommended developing business plans with a scenario that inflation “Continuing to be monitored,” but since he did not rule out that it could worsen in the second semester and especially in the last quarter of 2023, he advised to accumulate a supply of goods and dollars “before”.

Goods were up 7.8% last month compared to February, while services were up 7.4%, up 105.7% and 100.2%, respectively, year-on-year.

Among the increases registered in March, the following articles stand out: education (29.1% per month and 96% per year) due to the start of the school year; Clothing and footwear (9.4% m/m and 118.8% y/y) coinciding with the change of season, and Food and non-alcoholic beverages (9.3% m/m and 106.6% y/y) for meat increase . , dairy products and eggs allocated by INDEC.

“We know that it hurts us, it occupies us, how it affects daily life and every family,” Presidential spokeswoman Gabriela Cerruti responded on her Twitter account and said that the government of Alberto Fernandez was “doubling its efforts” .

“The number we see today represents the worst moment of the impact of the war on world prices and the worst drought in the history of the country,” Cerruti argued, and predicted that “it was the worst moment and that the downward trend started lower” that you expect to “see the reflection soon.”

IMF forecasts

consumer prices they have accumulated growth of 94.8% in 2022 with a notable acceleration from the 50.9% confirmed in 2021.

According to the International Monetary Fund (IMF), inflationary pressures will remain high in Argentina, whose economy the agency ranked second in the region with the highest price growth in the latest global economic panorama, with inflation of 98.6% by 2023, behind Venezuela, where it was forecasted 400%.

“We expect inflation to remain high and at very high levels,” and therefore “tight monetary policy, as well as fiscal policy in line with the Fund-supported program, would be particularly important.” Petya Koeva, Deputy Director of the IMF Research Department, said this this week on the sidelines of the spring meetings in Washington.

The factors noted by experts are the issuance of money to finance the budget deficit, which increases the amount of local currency, in the face of a shortage of foreign exchange and low demand for the peso from the public, which supports high inflation expectations, as well as the so-called inflationary inertia reflected in the baseline (7.2% per month).

Argentina has a core deficit target of 1.9% to be met by 2023 and cuts in cash funding from the Central Bank in a program agreed with the IMF, which financed $45 billion in debt under an extended loan agreement .

The latest private forecast that the Central Bank collects on a monthly basis is higher than that of the IMF, as it states that inflation will be 110% this year and 90% in 2024.

(EFE)