Inflation in Argentina is about to put Alberto Fernández’s government before a reality that is difficult to digest.
Although the expectation is that the hottest numbers of price increases are behind, everything indicates that the accumulated inflation during the government of the Frente de Todos will surpass, before the end of 2022, the inflation accumulated by Mauricio Macri in his entire term of office.
In September, the Consumer Price Index (CPI) slowed down at the margin to 6.2%, and cumulative inflation since December 2019 reached 254%.
But that figure will not take long to spiral.
As can be seen in the latest Relevamiento de Expectativas del Mercado (REM) published by the Central Bank (BCRA), private economists expect the rise in prices to remain above 6% per month in the last quarter of the year.
If that happens, the current government’s cumulative inflation will climb above 300% by the end of 2022.
In this way, and one year before the end of the term, the accumulated price increase will already be higher than that recorded by the Macrism between 2015 and 2019.
Sebastián Menescaldi, director of EcoGo, explains that if inflation were 6.5% in October -the official data would be known in the middle of this month it would be enough for November’s price increase to mark 5.2% to exceed the 296.8% accumulated by the previous administration.
After analyzing the latest data for October, incorporating last week’s increase in food prices, EcoGo adjusted its forecast upwards.
It now expects the price increase for the tenth month of the year to be 6.6%.
Given this scenario, the economist discounts that with this month’s inflation, whose official data will be known in mid-December, the 296.8% left by Macri will already be surpassed.
At Empiria, they also foresee that the current administration’s accumulated inflation will exceed the inflation recorded by Macri this year.
But according to their calculations, that would happen only in December.
“Taking into account that the inflation accumulated by Macri during his term was 293%, based on our estimates, that number would be surpassed in the current administration in December of this year with an accumulated inflation of 311%”, said economist Guadalupe Birón to Bloomberg.
For this to happen, the consulting firm headed by former Minister of Economy Hernán Lacunza anticipates that the CPI in October and November would be around 6.5% before decelerating slightly to 6% in December.
Santiago Manoukian, the chief economist of Ecolatina, provides a similar view.
According to his projections, the current administration’s price increase would exceed that of the Macri administration in December.
The previous government, he calculated based on his estimates and Indec data, recorded inflation of 293%.
“The accumulated inflation during Alberto Fernández’s term of office would give us 284% as of November; in December, it would exceed it, reaching 308%”, he specified.
The reason for this difference that each consulting firm assigns to the CPI of the Cambiemos administration should be framed in the fact that during the first months of the Macrism, the National Institute of Statistics and Censuses of the Argentine Republic (Indec) did not survey the data of the price increase because it was in the process of “statistical emergency”.
550% FLOOR FOR 2019-2023
Beyond whether Macri’s record is effectively surpassed in November or December, it is expected that the Frente de Todos Government will end with the highest price increase in three decades since Raúl Alfonsín’s presidency.
If inflation in 2023 were 60%, as forecast by the Argentine Government, the cumulative price hike of the Frente de Todos would amount to over 550%.
“In our scenario, if the Budget’s forecast is met, the increase will rise to 563% by the end of 2023.
But if inflation is sustained at 100%, it remains at 728%, and in our base scenario, it exceeds 860%,” assured Menescaldi.
“There comes a time when the numbers escalate quickly,” added the director of EcoGo.
On the other hand, Manoukian calculates that if inflation in 2023 were 60%, as it appears in the draft Budget, the price increase of the four years of the Frente de Todos would close at 553%.
However, he added that according to Ecolatina’s current projections, such a figure would climb to 675%.
If this forecast is confirmed, the average inflation rate of Alberto Fernández’s government will amount to 65.2% per year.
Finally, Manoukian considered it “very improbable” that the projected inflation rate of 60% could be reached in 2023 since it would imply assuming a trajectory for the year of 4% per month.
According to the latest REM, analysts expect price increases of 6% in January, 5.9% in February, and 6% in March.
With information from Bloomberg in linea