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The inflation expected by Argentines for the next 12 months fell sharply in March - Infobae
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La inflación esperada por los argentinos para los próximos 12 meses bajó con fuerza en marzo
La encuesta que realiza la Universidad Di Tella arrojó que la población espera este mes que el IPC del próximo año acumule un aumento del 123,8% mientras que en febrero era 170,8 por ciento
www.infobae.com
March 26, 2024
The survey carried out by the Di Tella University showed that the population expects this month that next year's CPI will accumulate an increase of 123.8% while in February it was 170.8 percent
By Agustin Maza
The Milei Government managed to make the markets and the population expect downward inflation. EFE/Matías Martin Campaya
In his first hundred days in office , President Javier Milei managed to get companies and market analysts to lower their inflation projections , although at high levels, something that also extended to the rest of the economic agents.
The variation in the Consumer Price Index (CPI) expected by Argentines for the next 12 months was an average of 123.8% for March, according to the survey carried out monthly by the Torcuato Di Tella University . It is a strong reduction, of 47 percentage points, compared to the 170.8% that the measurement had shown in February.
The university also consulted the expected inflation for the next 30 days: the survey showed 15.46% when last month it was 19.08% on average. The median decreases from 20% to 15% in that same period.
Sharp drop in inflation expectations for the next 12 months. (Say Tella)
According to Di Tella, this indicator has a higher response rate than the annual one, which suggests that in a context of high uncertainty, like the current one, it is probably easier for the person to answer what they think will happen in a month. This question was added in May 2023.
Regarding the annual inflation expectation, the reduction was generalized , that is, both by regions of the country and by different family income levels.
For example, the expected CPI variation for the next 12 months in Greater Buenos Aires is 140.7%, 61.1 percentage points lower than the February measurement. In the Autonomous City of Buenos Aires (CABA) it is 148.2%, 66.3 points below the previous month.
In the interior of the country, a significant decrease was also observed compared to February measurements: the university surveyed an average of 111.2%, when in February it was 147.1 percent.
Also in March, the survey determined a significant reduction in expected inflation among households with different educational levels (which also approximates the level of income) and a change in trend.
Significant reduction in expected inflation among households of different educational levels. (Say Tella)
Unlike recent months, the values reported this month showed that individuals with a higher educational level have lower inflation expectations. Thus, individuals with a lower educational level registered a decrease in perception, going from 151.9% in February to 127.7% this month, while those with a higher level went from 180.5% in February to 122.2% in March.
The variation of the CPI in February was 13.2% after the 20.6% in January and the 25.5% left by the flash of a December marked by devaluation. The accumulated figure for the last year is 276% and places Argentina as the leader in the world inflation ranking.
The preliminary private surveys from March show continuity in the deceleration process. Meanwhile, the Government postponed increases in public services such as gas, water, transportation and fuel with the aim of supporting this trend. “ Inflation is going to collapse ,” Milei usually says in her interviews.
The Minister of Economy, Luis Caputo , assured this weekend that the CPI “runs at one monthly digit” although he reiterated that it is not yet reflected in the index. That is why talks continue with mass consumption companies and supermarkets so that “2x1” promotions are put aside to move towards a reduction in list prices. Although that will influence the level more than the variation.
For Luis Caputo, inflation is already running at single digit monthly levels.
These results are based on a sharp drop in the purchasing power of family income, which reduced internal demand , amidst an official dollar that remains flat and a strong fiscal-monetary adjustment. In mass consumption companies there is an alert because products began to expire on the shelves of supermarkets and local self-service stores .
The challenge of the coming months will be to sustain the fiscal adjustment that falls mainly on retirees and the middle working sectors. A warning in this sense was reiterated this Tuesday by the director of the Western Hemisphere Department of the International Monetary Fund (IMF), Rodrigo Valdés , in the midst of ongoing negotiations for a new program.
The official highlighted that the results in the first days of the Government were “impressive” but called for improving the quality of the fiscal adjustment. “The quality, I want to emphasize, not the quantity,” he pointed out.
