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Until when can inflation be kept below 3% per month


Economists warn that 'suppressed' inflation could only be contained until elections, beyond the current political crisis.

Natalia Muscatelli

09/16/2021 13:00

  • Clarí

  • Economy

Updated 09/16/2021 1:00 PM

The 2.5% rise in inflation during August was the lowest change since August last year.

Also, an incentive for the Government plunged into a major political crisis, seasoned with multiple resignations of officials.

This climate, in principle, does not add any extra ingredient to the price management. But the specialists point out that the level of inflation

below 3% per month could be ephemeral: they

argue that this scenario could only be reissued in September, October and "even in November", they estimate. But they take it for granted that,

after the elections, the inflationary curve will once again take an upward push.

Pablo Goldin

, director of the



warns that the drop in inflation in recent months "is not something surprising."

And it is totally

transitory because after a long time of inflationary repression, nailing the dollar, the tariffs, stepping on the flesh, etc.

months were to come with monthly inflation below 3% ”

, he commented.

Although this situation could be maintained in the next two or three months, the floor of the variable would not be less than 2.5%, according to his vision.

How long could the level of retail prices be sustained below 3%? 

"In September, October and November it could be but, in December, I doubt it"

, answers

Lorenzo Sigaut Gravina

from the Equilibra consultancy.

"You have to see what happens with the economic variables after the elections," he says. And remember that

“core inflation

(that which does not take seasonal variations into account) was

still 3.1% in August.

It means that inflation is still undermined by the freezing of rates and the dollar.

This situation may last a little longer but not beyond the elections, "he


For the consulting firm ACM, inflation will continue in the coming months in the order of 3% -2.5% per month.

"Although some factors could moderate the inflationary slowdown (such as the pending adjustments in fuels and the slowdown in the rate of devaluation, among others), a good part of the slowdown would be the product of measures that simply

postpone the inflationary phenomenon



"Added to this,

an increase in public spending due to the elections

(with its impact on the monetary issue) is expected, which could cause

a resurgence of inflation towards the end of the year," he



For this reason, the consultancy estimates "inflation around 48% for 2021," he said in a report.

Meanwhile, from the consulting firm LCG they warn that "by the end of the year we expect the monthly increase in prices to average 3%, which would place inflation close to 50% for December."


A less deceleration in prices is expected towards 2022 as

a result of relative price adjustments (exchange rate, rates, among others)

that are being postponed due to the November elections."

Finally Ramiro Castiñeira, chief economist of the Econometrica consultancy, said that

the political crisis after the resignation of the Kirchner ministers does not add anything new to the issue of inflation management.

"Delaying dollar and rates for stepping on

the prior inflation at is election as Argentine as tango and asado. Then, culminating elections, all currency issue to finance public spending generates a drain reserves culminating in devaluation and inflation after the elections, by then the election objective was met. The cycle begins again in the next election. Almost since 1946 it is the only economic policy that exists in Argentina.

Populism, public spending, emission, devaluation and inflation, in a loop

" , he pointed. 


Look also

How far should the new IFE go to maintain the purchasing power it had in 2020

Risks for the Government of "putting more pesos in people's pockets"

Source: clarin

All business articles on 2021-09-16

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