Inflation in Argentina moderated to 20.6 percent in January, below the 25.5 percent in December, but with an interannual rate of 254.2 percent, one of the highest in the world.
The items with the greatest increases in January were goods and services, with 44.4%, transportation (26.3%), communication (25.1%) and food and non-alcoholic beverages (20.4%), according to the official institute. of statistics Indec.
The consumer price index for January coincided with the previous estimates that Javier Milei's government had made, around 20%, in a context of “stagflation” -economic stagnation with inflation- announced by the president himself shortly after taking office. .
After the 50% devaluation of the peso in December, the liberalization of almost all prices in the economy and the first adjustments in transportation and public services rates, Monthly inflation remains close to the historical record of February 1991 (27%).
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“There is little to celebrate with inflation at these levels, especially because in December salaries moved below 9% and in January closer to 15%, but also below inflation,” economist Hernán Letcher summarized to the AFP.
The government had begun its administration with an inflation of 25.5% in December, which brought that of all of last year to 211.4%.
The December escalation left for January, due to statistical drag, a high inflation rate, to which strong increases in public transportation (45%), private medical services (40%) and fuel have been added in the first month of the year. (26.4%).
As observed by the consulting firm Eco Go in a report, despite the high January figure, “inflation showed a strong deceleration in the month, driven largely by the brake imposed by the fall in consumption, with salaries strongly deteriorating after the correction of some relative prices.”
“With what we are doing in fiscal, monetary and exchange matters, we are lowering the inflation rate. Wholesale (inflation) is already collapsing,” Milei said during his recent tour of Israel and Italy.
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According to Indec, a kilo of bread cost 1,214 pesos (1.3 dollars) in the country, a liter of milk 842 pesos (0.95), a kilo of sugar 1,180 pesos (1.47), sunflower oil ( 1.5 liters) 2,630 pesos (2.98) and ground meat from 3,469 pesos (3.93).
“Some things I ate before I don't eat now, like cheese and meat,” Elsa González, a 74-year-old retiree, told AFP.
On average, the health sector registered a monthly increase of 20.55%. “With daily medications, now I have to take half the pill or less than what I took before because of the price,” said Ramón Zamudio, 70, a person in charge of cleaning and taking care of a building in the center of Buenos Aires.
The Minister of Economy, Luis Caputo, predicted that inflation will be lower in February and March. “It's already going down,” he said.
“Inflation at these levels will always seem like a horrifying figure to us. There is clearly a long way to go in terms of inflation,” said presidential spokesman Manuel Adorni at a press conference this Wednesday, who, however, vindicated the policy that the Milei Government is applying.
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Inflation at these levels will always seem horrifying to us.
The International Monetary Fund (IMF) believes that monthly inflation in Argentina will reach single digit levels during the second quarter, with an annual rate of 149.4% in 2024, from 211.4% in 2023.
That horizon, however, looks extremely ambitious for most private consulting firms, which on average calculate an inflation of 227% for 2024, taking into account the strong increases in services that have already occurred in February plus those projected for the coming months.
AFP and EFE
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