Saturday , January 23 2021

Inflation was discouraged in November and stabilized in December

Economists and consultants agreed that last month they appeared for the first time in a few months a slowdown in price increases, which determined that the rise in living standards in November was finally between 2.5 and 2.8%.

This is estimated as "Rio Negro" by some consultants who emphasized as a coincidence that in November there was no increase in the percentage, apart from the metro increase for the Federal Capital, which contributed to a lower price escalation in addition to a recessive a picture that lives in the local economy.

Likewise, annual inflation will end between 45 and 47 percent, a very high figure, although it should be made clear that in this case, with the normalization of Indec, their number is quite adapted to the daily reality of citizens.

The official body will circulate the development of the consumer price index for Thursday next Thursday.

At this point in time, the economist and consultant Maria Castiglione expected inflation to reach 2.5% in November.

"It is clear that there is a significant slowdown and there is a clear influence that regulated prices remain stable.What was seen last month that in the first days there was a sharp decline in inflation in October but in the last two weeks stabilized quite a" , stressed the economist.

We must note that September inflation was nothing less than 6.5% and October 5.4%, which in fact halved in November.

"The retention of the price increase, which remains for December, is low, so we believe that in December the level of inflation will be similar to November, may have a seasonal effect at the end of the year, but we do not believe that will affect the values ​​up, "Castiglioni said.

At the last point, the consultant said end-of-year sales were generating price pressures for some commodities, but made it clear that by the end of 2018, when recession and declining consumption "would be much more limited, and even bids would be multiplied, because merchants are looking to restore some land for that date. "

"We think that the same as in the year will be about 47%, and in the beginning of 2019 we see that although it is not yet fully known how much the rate will increase, there will be a scenario very similar to that in November and December, although annual interest rates will continue to give very high values, "he added. the economist

It is clear that under this lower interest rate scenario and the latest REM survey conducted by the Central Bank, which outlines lower expected inflation over the next 12 months, there were specific factors for this. encouraged a reduction in the interest rate of titles below 60%, a figure that remains astronomical.

Orlando Ferreres consultancy also saw a sharp slowdown in price rises in November, which led them to calculate last month's inflation by 2.5%, while the whole year was 46.5%.

"What could be observed in the last month was a much lower rate of increase in prices across sectors, even in some that were more sophisticated as food," said Fausto Spotorno, chief economist at Ferreres .

With this slightly more limited inflationary outlook, Spotorno stressed that in December they expect a similar inflationary climate to what happened in November, with some sectors spreading at the end of the year, but without significant consequences at a general level.

"December inflation will be below 3%, I think the closest figure will be between 2.6 and 2.8%," said economist Ferreres.

Spotorno also praised the Central Bank's decision to cut interest rates in recent weeks, especially on Thursday and Friday when Leliq's yield fell below 60%.

"I think the Central Bank notes that inflation is loosening that the dollar is not exerting much pressure at that time, and that's why it sees room to continue to reduce the percentage but cautiously," said Spotorno.

In the same vein, economist and consultant Raul Ocha calculated that November is a little more positive for inflation, assuming it reached a culmination of between 2.5% and 2.8%, and that it "should gradually begin to observe low levels of inflation ".

"Complying with the Central Bank's monetary plan and the fiscal deficit reduction model no doubt that this contributes to lowering inflation, and we also have to assume that we are in a recession." The question that may be disturbing is what can happened with the exchange rate, as the election date of 2019 is approaching, I think there will be a nervous center, "the economist added.

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