January Inflation Lower Than December Due to Decreased Sales

On the 14th of the next Wednesday, INDEC is anticipated to disclose the inflation data for January, which, according to consultants, was between 20% and 23%. Compared to December (25.5%), there was a slight slowdown in the third week of the month.

The data from the Buenos Aires city government provides an initial insight into what happened in the first month of the year. In the Buenos Aires region, the January increase was 21.7%, the highest since the start of the statistical series in 2012. The index’s interannual change was 238.5%.

Rocío Bisang, an economist at the EcoGo consulting firm, notes that her inflation estimate for January is 21.2%. She remarked that the month was heavily influenced by the carryover from the December increases, with areas like Health and Transportation seeing significant increases in prepaid bills and costs of gasoline, train, and bus.

Lorenzo Sigaut Gravina, an economist and director of the Equilibra consulting firm, noted that the preliminary data for January was lower than that of December, estimating it at 22.5%.

The decrease in purchasing power, with wages lagging behind prices, acted as a brake on inflation, leading to a slowdown in January. This was reflected in the fall in demand for cars, shopping malls, supermarkets, gasoline, and retail stores.

According to a study by the Orlando consulting firm Ferreres & Asociados, based on prices of over fifteen thousand goods and services in GBA, January’s inflation is anticipated to be close to 18% monthly, with an interannual increase of 244.5%. Core inflation rose at a monthly rate of 19.5%, marking an annual increase of 268.8%, highlighted economist Fausto Spotorno.

The Libertad y Progreso Foundation estimates the January increase to be around 19.4% monthly, a slowdown of 6.1 percentage points compared to December’s INDEC data.

The year’s first Market Expectations Survey (REM) from the Central Bank showed economists estimating a monthly inflation rate of 21.9% for January and 18% for February, with an annual rate of 227%.

The LCG consulting firm, which predicts a 23.1% inflation rate for January, found in its food survey that higher price levels were recorded in the first week of February. It accelerated by 2.3 points compared to the previous week, averaging a 13.4% increase over the last four weeks and a 10.3% end-to-end increase over the same period.

As for February’s inflation, consultants agree that it will decrease compared to January, which is traditionally a higher month.

According to Lautaro Moschet, an economist from the Libertad Foundation, January’s CPI leaves a 3.1 point drag for February, less than half of December’s 6.8 percentage points. This is the lowest since October and will contribute to the deceleration next month, which is projected to be around 14%.