Inflation. In March, it was again around 4% and food prices are accelerating

The permanent remark in the gondolas is one of the biggest concerns – along with the impact of the pandemic and the arrival of vaccines – of the government in an election year. Both for the economic team and for the analysts who generally carry out monthly surveys, Inflation will return to around 4% in March – a floor from which it has not been able to move away since last December – with a significant acceleration in food prices.

Economists consulted by THE NATION projected that last month’s price hike was between 3.9% and 4.5%. In the government, they confirm that the number – in a month of strong seasonality – is bad and will be around 4%, as in December and January. All claim that the food has accelerated its rise and that it exceeded the general level in March. Some projected increases of up to 6% in food and beverages, the chapter with the most weight in the CPI.

If inflation finally stays at 4%, it will have to rise to more than 1.6% per month by the time it is to reach the macroeconomic target set by the Minister of the Economy, Martín Guzmán, in the budget. If it is close to 4.5%, meanwhile, you need to score 1.5% per month to reach that goal.

After a week with the focus on poverty data for 2020 (an increase of 6.5 percentage points in one year to reach 42% of the population), who publicly expressed concern within the ruling party about remarks in the gondolas was the Minister of Social Development, Daniel Arroyo.

“In recent months, there has been more economic activity, more construction and textile industry trades, and therefore a little more income, especially in the informal sector. but the problem is the price of the food ”, stated in an interview with THE NATION.

“We are aiming for a gradual and consistent reduction in inflation. We had a projection that the first quarter was going to be higher than the rest of the year, “Guzmán said. in an interview on CNN. “Extrapolating the first three months to the whole year would be a mistake. 29% is the objective of macroeconomic policy, ”he added. The minister, like other economic referents of the ruling party, underlines that the international prices of basic products impacted on domestic prices. President Alberto Fernández also suggested it last February, when he pointed out, for example, the intention to export bone-in meat to China, a fact which he says has resulted in a transfer. towards domestic prices.

However, in the ten countries which export the most food products in the world (USA, Netherlands, Germany, Brazil, China, France, Canada, Spain, Italy and Belgium, according to the World Trade Organization) – the ranking in Argentina has not appeared for some time, annual inflation fluctuates between 2% and 4% per year despite the pressure of rising international prices.

Juan Luis Bour, chief economist of FIEL, estimates that the March price increase was 4.4%. Food and beverages would have posted an increase of 4.8%, according to his estimates. In January, this chapter had risen in the CPI FIEL by 2.8% and 4.6%, respectively. For Bour, inflation will remain high in April and possibly May, with an annual measurement around 45%.

For private consultancy LCG, the end of March was around 4.5%. “What worries is the acceleration. We have just two weeks of slowdown and in the last three an uptrend has started again. With food increasing above 1% per week, almost 6% per month. On the other hand, the remarkable rhythm is scary: nearly 20% of the products studied undergo increases in one week. This means that in five weeks all economy prices are updated. It’s a very powerful inertia, ”said Guido Lorenzo, director of LCG.

In C&T Economic Advisors, they estimated an inflation for March of 4.2%, a figure higher than 2.8% in March 2020 and 3.6% in February of this year. The estimated year-over-year change in consulting firm Camilo Tiscornia and María Castiglioni was 40.8%, the highest since June 2020. “The items with the greatest increase were clothing and education, seasonal behavior typical of March. But what has had the most impact is the 6% increase in food and drink ”, they indicated and added for the month the impacts of increases in metro, taxis, prepaid and fuel.

For the consulting firm Orlando Ferreres, meanwhile, the increase in March was around 4.1% (with the food rising one tenth above the general level). For Ecolatina it was 3.9%, while food increased 4.2%. “It’s a worrying number: inflation accumulated by 12% in the first quarter and the official target was dismissed, ”said the consulting firm’s chief economist, Matías Rajnerman. “In a context where the official dollar has started to rise again, price increases should slow down from April, provided that importers of goods can continue to access the official market. However, it will remain closer to the 3% target than to the government’s 2% target, accumulating in the year around 40% “, added.

In recent days, Guzmán has once again called on the market to trust the official inflation targets. “In 2020, the market projections were between 50 and 60%. We were aiming for 33% and 40%, and it was 36%, ”he said, despite the fact that doubts no longer hover only among economists and businesses, but have also started to seize those who sit with him. to negotiate at the International Monetary Fund. (IMF). There, it is already doubtful whether the expectations the minister was seeking to generate – with a depressed dollar and slowly falling tariffs to keep wages up to beat inflation – are actually entrenched.

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