Inflation forecasts remain high for April: would be around 4%

The projections of the consultants for this month anticipate that April inflation will be around 4%. According to these estimates, the index will be lower than the 4.7% of March, but they see little chance of drilling the floor of 4%: the remarks on food before the announcement of the Essential Prices plan explains part of the increase.

For the consultancy Elypsis, in the third week of April, inflation had a slight deceleration compared to the previous week: 0.5% vs. 0.7%. Thus, the average variation of the last four weeks was 4.2%, compared to 4.4% that was recorded days ago. Core weekly inflation -which clears the measurement of the effect of seasonal and regulated prices- was 0.7% compared to the previous 1.1%.

Nicolás Crespo, economic analyst at Elypsis, explained that “although in general we can see a decline, inflation remained high in recent weeks in food.” The general inflation figure that we are projecting for April is around 4%, sometimes 4.1%, sometimes 3.9%, borderline, hardly below 4%. “

Regarding the evolution of core inflation, the specialist said that “in general, cyclically when this indicator is very high a week or two, then it tends to loosen a bit”.

For Crespo, “a good part of inflation in April is the product of the anticipatory rises of food companies.” The four weeks that elapsed since the design of the new Essential Prices plan gave scope for companies to cover themselves by highlighting. “It’s been three weeks since core inflation has more than 1%,” he said. And he said: “Next week, Food should be more stable after having gone up a lot.”

Regarding the effectiveness of Essential Prices, Crespo stressed that “this is not an anti-inflationary plan, it is a social containment plan, it serves to protect the pockets of the most disadvantaged sectors, it is not something that will lower inflation. it has some impact, it will be marginal, the weight of these products in the index is low “.

For Jorge Vasconcelos, an economist at IERAL, “the ads tend to generate some relief in the pockets of different consumer segments, which will have a real impact on expectations as inflation begins to fall.” He argued that the expansion of the scheme of “Caring Prices” and the deployment of the rest of the incentives (Now 12, focused discounts, Anses credits) “have no entity to lower inflation, a phenomenon that has to do with other variables.” Vasconcelos indicates that in the second week of April appeared the first signs of moderation in the rate of increase in prices.

“We have to see if this slowdown deepens,” Vasconcelos continued, “or if there is a new shake-up in expectations, with a time that is increasingly scarce in the face of the electoral process.” Technically, the brake on inflation observed in the The second week of April shows that the short-term instruments of economic policy had begun to recover their effectiveness, with the monetary base tending to contract 1.7% in April compared to February, with a year-on-year change that validates slightly more than half of 12-month inflation (30% vs. 55%) However, we must see the reaction of the exchange market to inflation data, to determine if the change in the trend of the last two weeks is extended or frustrated again. ” And he stressed that “the measures of last Wednesday, which have more political component than economic fundamentals, need to converge with an effective appeasement of inflationary tendencies, so that they can be classified as successful”.

For María Castiglioni, director of the consultancy firm CyT, “it is difficult to quantify what the effect of the measures will be, but without doubts (inflation in April) will be less, the impact has more to do with a state of mind than with recovery” .

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