Monday, June 24, 2024

ECONOMY | 15-12-2022 23:44

Inflation slowed to 4.9% in November – lowest figure in nine months

According to the INDEC national statistics bureau, prices have increased by 92.4% over the past 12 months; Monthly rate for November less than expected, while quarterly economic growth picked up before government renewed price control scheme

Inflation in Argentina decelerated last month to 4.9 percent, but price increases so far this year are among the highest in the world at 85.3 percent, the INDEC statistics bureau reported on Thursday. 

The November rate was the lowest recorded monthly figure since February when inflation reached 4.7 percent.

Over the last 12 months, the cost of living has risen 92.4 percent – the highest rate in 30 years. However, there is now a good chance that annualised price hikes will remain below the fearful three digits forecast by private consultancy firms over the past few months. 

Public services and communications spearheaded last month’s price increases with food prices – the most important item – bringing up the rear, according to INDEC. Food and non-alcoholic beverages rose 3.5 percent in November, tampering down the overall price index. Elsewhere, education at 3.8 percent was the item rising the least. 

Housing, water, electricity, gas and other fuels was the item that climbed the most (8.7 percent) with electricity and gas standing out in particular due to the segmentation of public service billing nationwide, which also affected water specifically in Greater Buenos Aires. Communications came next with 6.4 percent due to the impact of the rising cost of telephone and Internet services, followed closely by alcoholic beverages and tobacco at 6.3 percent (chiefly due to the increased price of cigarettes).

Despite the deceleration of the monthly rate, social organisation activists demonstrated Wednesday outside supermarket doors across the country to protest against the high cost of living and expensive food.

President Alberto Fernández’s government is trying to halt runaway inflation via price agreements with different sectors. Until now it has obtained pledges from food, garment, footwear and petrol companies, among others.


GDP rise

Meanwhile, INDEC confirmed that Argentina’s Gross Domestic Product grew 1.7 percent in the third quarter of the year by comparison with the second. 

Consumer spending drove activity, which was higher than the previous quarter when there was one percent growth. Measured against the same month last year, the economy expanded 5.9 percent according to INDEC data also divulged Thursday.

According to the Central Bank’s regular monthly survey of analysts and market experts, Argentina’s economy will expand 5.3 percent this year but slow down to under one percent growth in the following – a year of presidential elections with drought affecting crops.

Shoppers are feeling the strain at present. Within the food and beverages, fruit, mineral water, soft drinks, juices, bread and cereals rose the most last month while vegetable prices dropped in most regions. 

Core inflation (excluding regulated and seasonal prices) was measured at 4.8 percent while the regulated prices rose 6.2 percent (largely due to
electricity, gas and water) and seasonal 4.1 percent.

Last month, Economy Minister Sergio Massa relaunched a price control programme under the name of “Precios Justos” whereby the prices of over 1,700 products were temporarily frozen. He has also negotiated agreements with petrol and footwear companies among other industries to cap price increases. Central Bank officials consider that these agreements, along with higher interest rates, contributed to cooling down monthly inflation.

The Central Bank’s monthly survey had projected a November inflation rate of 6.1 percent while estimating this year’s inflation at 99.1 percent, a percentage point below their 100 percent forecast in the previous month.

Regarding next year, participants foresee 2023 inflation of 99.7 percent (3.7 percentage points more than the previous survey) and 75 percent for 2024 (5.4 percentage points above the previous).

Argentina has been suffering from annual double-digit inflation for years. Such persistent price increases impact poverty, which in the first half of this year affected a population provisionally measured at 47.32 million inhabitants in the May census. Last year’s inflation was 50.9 percent.



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