The May inflation It could lead to a major surprise, which is not yet in anyone’s calculations, not even the Government itself, if the first projections made by economic consultants are confirmed.
Eco Go, the consulting firm directed by Marina Dal Poggetto and Sebastián Menescaldi, estimated that This month’s CPI could fall to 4.2%. Nothing less.
The company is one of those that monitors the price evolution on a weekly basis. His report – distributed to his clients on Monday night – surprised banks and multinational companies.
Also in official offices. The economic team has been working with the idea that this month’s inflation could start with “5.” This was stated by Economy sources and also by the Central Bank, through the report presented on Wall Street by the vice president of the entity, Vladimir Werning..
The causes of the fall in inflation
There are some key data to understand the sharp slowdown in inflationary dynamics.
1) The decisive slowdown in food and beverage prices. According to Eco Go, the inflation projection for this item would be 4.8% during May. Well below the records of previous months.
May inflation could bring a major surprise
During the first week of the month, food prices increased 1.1%. For the consultant’s estimate to be met, inflation in this item should be 1% weekly from now on. Something that could be fulfilled perfectly, analysts believe.
2) The postponement of the indexing of services. The Government decided to put in the freezer the update of the rates for electricity, gas, drinking water and the buses that circulate through the AMBA.
According to Eco Go, these delays would allow the Government to show a “savings” of almost two inflation points in the month. Specifically, 1.8 points.
Obviously, this is a very controversial decision: it is a postponement of inflation for the future. It is known: the tariff update will be necessary if, as he stated so many times, Javier Milei maintains the focus on the zero deficit. Any update that is not taken directly implies a greater volume of subsidies.
3) Prepaid. The obligation of companies to lower the cost of fees would allow the Government to lower the CPI. According to Eco Go, the INDEC should measure a deflation of 7.8% in the “Health” category.
Companies are applying a reduction of between 20% and 22% in membership fees, below the 33% reduction estimated by the ruling party itself when it took the measure..
Prepaid companies are applying a reduction of between 20% and 22% in affiliate fees
For now, the companies in the private medicine They resist pressure to refund the money collected in excess between January and April.
Activity in red
The economic team admits two central causes for the price rise show a strong deceleration:
– Manufacturing companies “had overlooked the increases,” since they anticipated a more complicated exchange rate dynamic, with a gap between the official dollar and the financial ones of at least 60%.
– A very strong recession, with falls in sales also deeper than those imagined at the beginning of the year.
According to industry sources, Food production fell between 7% and 9% in April against the same month last year. This is a drop similar to that of March.
