The Government of Alberto Fernández received a hard blow this Friday, given that the inflation index published by INDEC shows a new acceleration in prices. The official information confirmed that inflation was 8.4% in April, a figure even worse than that of March (7.7%) and a bucket of cold water for Sergio Massa in the midst of an electoral campaign that demands definitions on the candidacies that the ruling party will present.
In addition, prices accumulate an advance of 32% so far in 2023.
With the new index known today, it was confirmed that inflation for the last 12 months reached 108.8%. This data is the worst that has been recorded since 1992, thirty years ago, when in January the accumulated annual figure had been 76%.
Closer in time, during the presidency of Mauricio Macri, in May 2019 year-on-year inflation reached a peak of 57.3%.
The inflation data of 8.4% in April left the economy minister’s disinflation plans on the sidelines, Sergio Massawho at the beginning of the year had anticipated a CPI below 4% for this month.
The alarming inflation rate for April exceeded expectations.
Prices: the main increases in April
As reported by INDEC, the division with the highest increase in the month was Clothing and Footwear (10.8%) due to season changes. He followed Food and non-alcoholic beverages (10.1%), with the highest increases in Vegetables, tubers and legumes; Milk, milk products and eggs; Sugar, sweets, chocolates, candies, etc. and Meats and derivatives. The increases in the Restaurants and hotels divisions (9.9%) were also notable; and Home equipment and maintenance (8.6%).
The increase in Food and non-alcoholic beverages (10.1%) had the greatest impact in all regions. Within the division, the rise in Meat and derivatives, and in Vegetables, tubers and legumes, was impacted, followed by Milk, dairy products and eggs; and ¬nally Bread and Cereals.
The two divisions with the lowest variation in April were Education (5.0%) and Alcoholic beverages and tobacco (3.8%).
At the category level, Seasonal led the increase (12.6%) followed by the Core CPI (8.4%); while the Regulated registered an increase of 4.9%.
Inflation: food increases worry
The projection on the annual increase of the food could reach the 197 percentaccording to a study prepared by the Center for the Argentine Recovery of the Faculty of Economic Sciences of the UBA.
The report details that projecting the current increases in the Food and beverages category, almost 200 percent per year could be reached between now and next year (March23-March24).
“This problem affects above all low-income households, who do not have the means to protect themselves from price increases, since they allocate most of their income to subsistence,” they said.
The interannual increases in food and beverages continue to lead the inflationary dynamics, where March and April averaged 9.5% per monthindicates the document and warns that the rate of inflation in food it increased by 2 percentage points measuring the first quarter of 2022 vs. 2023, with which the rate of repricing increases and there is nothing to suggest that it will loosen.
“It is worth clarifying that annual inflation narrates the behavior of prices during the last 12 months. However, the general rate of inflation a year ago is far from being similar to the current one (5% monthly average in the first quarter of 2022 vs. 7% for the same period of 2023),” explained the Center for Recovery Studies Argentina.
The body, directed by the political scientist Luis Tonelli, remarked that calculations such as annualizing the monthly rates of changein order to know what inflation would be after one year if the current levels of inflation persist.
The projection on the annual increase in food could reach 197 percent
This gives an approximation of the magnitude of the problem, the report added.
Basic food basket: what were the foods that increased the most
Inflation hits those who have less the hardest and proof of this are the numbers of the basic food basket (indigence line), which increased by 120.1 percent per year and the total basic basket (poverty line) that grew by 113.2 percent, both above inflation.
Of the products expressed as part of the basic food basket, there were strong year-on-year increases to March, such as fruits and vegetables, sugar (198.2%), oil (186%), noodles (152.9%), eggs (152.8%), beer (146.9%) and wine (133.2%).
There were increases in line with headline inflation in Dairy products, soft drinks, cookies, cold cuts and sausages, and white meats.
Butter, cheese, and yerba mate grew below inflation, and prices red meat in individuals much lower – around 87 percent per year, against a general level of more than 100 percent.
Precisely meat will be one of the key foods that will grow this year and push up the average food inflation, since it is recovering the delayed price of the second half of 2022.
There were strong year-on-year increases to March, such as fruits and vegetables
In reference to specific products, the maximum increase was in the kilo of oranges, which grew by 422.2 percent compared to the same month last year.
Other high increases were observed in the kilo of sweet potato (374.1%), potato (267.2%), lettuce (239.1%) and pumpkin (213.5%).
On the other hand, the kilo of apple increased by 171.1%, and that of onion by 170.8%. All seasonal products.
Other goods with high increases, higher than 150% per year, were the kilo of sugar, sunflower oil, diapers, dozen eggs, hamburgers, and powdered soap.
Increases were observed one notch lower, but still higher than average inflation, in wine and beer, soft drinks, salt, dairy products, flour, cookies, cold cuts and sausages, and chicken.
As opposed, the lowest increase occurred in canned tomato (73.2% annual), and other products with values below annual inflation were cuts of meat, bread, butter, cheese, yerba mate, mineral water, and personal hygiene products.
Meat cuts, on average, grew 15 points below general inflation, unlike the accelerated pace they took the previous year.
