This year, inflation would have a floor of 30% – 07/15/2018



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Pending the official data on inflation for the month of June, which INDEC will announce tomorrow, economists have already warned that they expected the level of the highest price of the last two years ] So much so that, according to government forecasts, they oscillate between 3.5 and 4% of increases while economists forecasts also evolve in a similar range. In this context, the price index is preparing to close the year with a floor of 30%

This figure is not minor because the government must make Great efforts not to exceed inflationary ceiling and meet its commitments against the International Monetary Fund (IMF) in exchange for receiving the dollars that still have to be pocketed.

Government estimate, which appears in the agreement with the IMF ] expects inflation between 25% and 32% for this year.

In this regard, June's inflation, accelerated notably by transfer to devaluation prices in food and drinks -, close a first half with a cumulative increase of more than 15% thus exceeding the government's target for the whole of 2018.

From the consulting firm Eco Go, the economist Federico Furiase notes that general inflation in June [1 9459003] increased by 3.7% according to his calculations. At the same time, underlying inflation (the one that does not include changes in seasonal badets) was [3,8%]. These levels, increase the interannual variation from 26.5% to 29.8%.

A few days ago, the estimate made by the Statistical Institute of Workers (EIT) showed an increase of 3.5% in the variation of the Inflationary index, which accumulates 16.1% so far this year and rises to 29.5% of the rise from one year to the next. .

According to Orlando Ferreres consultant's calculations, inflation in June reached 3.9%, fueled by a 4.3% increase in food and beverages; 7.2% in transportation and communications; 5% on fuels; 7% on public transport; 15% in the cell phone and 5.5% in the Health category, due to increases in prepaid drug fees that were around 7.5%.

For consultant Elypsis, the price change in June was 3.8% as detailed by Gabriel Zelpo, one of his economists. Well, he warns that by July, the inflationary pressure will be lower: in the order of 2.5 or 3%.

Before, in the second half, badysts' concerns refer to a kind of "bottleneck" that the economy will have when the impact of the Adjustment that the government has already begun is beginning to be felt. An adjustment that will be "flavored" with the aftermath of the bullfight discussion of paritarias, the rearrangement of prices and the brake of economic activity.

According to consulting firm Ecolatina, "l because inflationary pressures will remain dormant in the second half of the year : not yet recorded all the transfer to the prices of the recent depreciation of the currency ", he warned in his latest report

. There is realignment of relative prices: the reopening of parities and the demands of energy companies to recompose the rising costs caused by the rising dollar show that inflationary pressures will persist even if the truce change persists. "

" If new dollar hikes do not materialize in the rest of the year, inflation would be around 13% in the second half of the year. it would be 30% in December 2018, higher than the center of the target (27%) agreed with the IMF and just below the maximum level (32%) ". "In this way, inflation will average 32% per annum during the first three years of the change, exceeding the annual average of the period 2008-2015 by more than 5 percentage points."

According to Victor Beker, director of the Center for Studies of the New Economy of the University of Belgrano (CENE), "all indications are that this year will be characterized by a process of stagflation, c & # 39; that is, the combination of stagnation with inflation, "he says. explains that, obviously, the price increases of the exportable products as an "importable" will result in additional points of the inflation rate, whose main drivers remained, until now, the rate adjustments . "The badyst recalls that" combination of devaluation and it occurred in 2016 and the result was an annual inflation of 40%. For the time being, the estimated rate for the current year has a floor of 30% " told the economist.

While devaluations were still badociated with the Traumatic and recessive processes, and this risk exists, warns the Institute of Studies on the Argentine and Latin American reality (IERAL) of the Mediterranean Foundation, also saves a positive scenario. "If this crisis occurs leads to a persistent change in relative prices, vectors will emerge that will allow a not-so-distant recovery Although consumption is falling, production indicators do not necessarily have to be the same. it would decrease in the same proportion, because there would be more production on the export side or temporary substitution of imports. Finally, inflation under control would put a floor to the deterioration of domestic demand, warned the institution.

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