Argentina's National Institute of Statistics and Census (Indec) released a report Wednesday stating that the Consumer Price Index (CPI) for November 2023 went up 12.% for a total of 148.2% so far this year and an interannual increase of 160.9%. November's figures represented a strong jump from October's 8.3%.
Inflation in 2022 had reached 94.8% in 2022, almost twice as high as the 50.9% recorded in 2021. It is now projected to reach 185% this year, which would be the highest rate since the 1989-1990 hyperinflation.
The division with the highest increase in the month was Health (15.9%), as a result of increases in medicines and prepaid healthcare services, followed by Food and non-alcoholic beverages (15.7%) -with the highest increases in Mineral waters, soft drinks and juices, Fruits, and Vegetables, tubers and legumes. Third came Communications (15.2%) due to increases in cell phone and internet services, the Indec found.
The lowest variations in November were recorded in Housing, water, electricity and other fuels (7.1%) and Education (8.3%).
In this scenario, fuel at Shell pumps went up around 37% Wednesday while the other brands were expected to follow suit in the coming hours. The new increase came in addition to last week's 15% and was reportedly driven by the 54% devaluation of the Argentine peso (from AR$ 366 to AR$ 800 for US$ 1).
The increase in fuel prices is expected to boost the ongoing inflationary process. The Argentine Confederation of Medium-Sized Companies (CAME) warned about the possible consequences of these adjustments and expressed its full availability to the National Government to collaborate in the design of public policies that will allow reaching the praiseworthy goal of zero deficit.
The structural deficit of the public accounts is one of the causes of the unstoppable inflationary process that our country has been going through for many years, CAME also said while insisting that the new prices will have a significant impact on the citizens' consumption capacity.
On the brighter side, the JP Morgan bank predicted that inflation in Argentina would decrease from the second quarter of 2024 so long as the measures announced by President Javier Milei's administration are properly implemented.
Headline inflation is expected to accelerate, accumulating slightly over 60% in December and January, JP Morgan also forecast. But if the announced measures are properly executed, inflation should start to decelerate in the second quarter of 2024.
The bank foresaw an average monthly inflation of 13.3% in the second quarter of 2024, 4.5% in the third quarter, and 2.3% in the fourth quarter while projecting a 3% annual GDP contraction in 2024 amid declining domestic consumption.
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