Argentine inflation expected around 2% in July, analysts estimate

Argentina's inflation rate is projected to hover around 2% in July, according to private sector analysts. This follows a June inflation rate of 1.9%, which marked the first time in 10 months that the monthly figure dipped below the 2% threshold.

Analysts attribute a potential slight rebound in July to seasonal factors, including the winter school holidays, and the impact of currency depreciation on food prices. While these projections, if confirmed by official data from INDEC, would interrupt the disinflationary trend observed over the past three months, most economists remain optimistic.

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Coincided with the figure of June and was the lowest since August of last year.

María Castiglioni, director at CyT Asesores Económicos, reported a 1.9% monthly increase in retail prices for the Greater Buenos Aires area. She noted that this figure matches June's rate and is the lowest since August of the previous year. Consequently, the year-on-year IPC national variation is expected to remain at 33.5%, consistent with June's level.

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As usually happens in July, the sectors related to tourism accelerated due to the effect of winter holidays, to which the soccer World Cup was added, which particularly impacted airfares. This explained the behavior of the seasonal component.

Castiglioni further explained that core inflation and seasonal components showed greater dynamism in July compared to June, while regulated prices moderated. The tourism sector, heavily influenced by winter holidays and the World Cup's impact on air travel, saw accelerated price increases. Food and beverage prices, a significant component of the consumer basket, rose by 1.6%, below the general average and the previous month's increase, with falling fruit prices contributing to this moderation.

EcoGo, another consulting firm, estimated a slightly higher overall inflation of around 2.1% for July. Their report indicated that stability in volatile seasonal items and discounts on clothing due to winter sales helped lower the general index in the last week of the month. For food consumed at home, EcoGo projected a 2% inflation rate for July, rising to 1.8% when including food consumed outside the home.

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The inflation of this item is projected at around 2% for July. Incorporating the variation of food consumed outside the home (0.6%), the inflation for the food category stands at 1.8%.