Bloomberg Line — This week the figure for Consumer price inflation for May 2024 in Chile and Mexico. According to analysts at Bloomberg EconomicsFelipe Hernández and Adriana Dupita, in both cases increases are expected that would place the figure above the target range.
In Brazilheadline inflation likely rose in May: another unfavorable data point ahead of the June 19 policy meeting.
In Argentina, price growth likely slowed again last month. We see no room for additional rate cuts, especially given the recent weakening of the parallel exchange rate. Still, that hasn’t stopped the central bank before. The Senate is expected to vote on Javier Milei’s tax reforms. A government defeat would jeopardize the backbone of the president’s economic strategy.
In Colombia, we see headline and core inflation rates falling in May, with the trend continuing next year amid tight monetary conditions, weak demand, and supportive base effects. Given the outlook, we expect the central bank to continue cutting rates and consider larger measures.
Get to know: These are the notable events and indicators of the week
On the other hand, in Peru, Hernández and Dupita expect that tight monetary conditions, slowing inflation and persistent economic sluggishness point to the central bank reducing rates from 5.75% to 5.5%. Authorities are likely to keep the door open to additional measures and reiterate that future decisions will depend on new data.
Below are the economic events of the week by country and day:
Argentina
He Thursday June 13 will be published Consumer price inflation for May 2024. Economists from Bloomberg They see it likely that inflation will slow down for the fifth consecutive month in May and reach 6.0% month-on-month, due to the sharp drop in consumption, which reflects lower purchasing power since Milei took office; the slow advance of the peso, which is controlling tradable prices, and a delayed increase in regulated prices.
Brazil
He Tuesday June 11th will be published Consumer price inflation for May 2024. Hernández and Dupita predict that Brazilian consumer prices increased in May at a similar rate to the mid-month reading and stood at 3.92% year-on-year.
“Our forecasts point to relatively stable core inflation. “We project that the average of the five basic indicators monitored by the central bank will be in the range of 0.25%-0.35%, consistent with inflation slightly above the target,” the experts noted.
Also read: Statements by Brazil’s Finance Minister fuel fiscal concerns
Colombia
He Tuesday June 11th will be published Consumer price inflation for May 2024, which likely fell to 7.07% year-on-year from 7.16% in April, a forecast that is still above the target of 3% +/- 1 percentage point, according to Bloomberg Economics. “It is likely that prices will decrease compared to the previous month. The risks of El Niño continue to decrease,” they explained.
For his part, the Friday June 14 figures will be released Retail sales for April 2024. The aforementioned experts estimate that these could have increased by 1.4% compared to the same period of the previous year, after seasonal factors affected the sector a month ago. This forecast would imply a small rebound after the negative figures of March and February.
That same day the Industrial production for April 2024, which could have increased by 7.6% compared to the previous year after seasonal factors hurt the March figure. “We see few advantages amid the difficulties of populist government policies and restrictive monetary conditions,” Hernández and Dupita indicated.
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Mexico
He Tuesday June 11th will be published Industrial production for April 2024. Hernández and Dupita expect that the figure has increased by 5.3% compared to the previous year, reversing the seasonal drag of March, which would imply a small advance month by month and would point to an increase in industrial production in the second quarter after falling in the previous two quarters.
By sector, manufacturing would have risen 0.78% month-on-month to its highest level since September, mining would have fallen 1.16%, for the third consecutive month, to its lowest level in two years, and construction would slow down after the strong growth seen in March.
Peru
He Thursday June 13 will take place Central Bank Monetary Policy Meeting, during which the Issuer is expected to reduce its reference rate from 5.75% to 5.5%, according to the cited experts. This would bring total easing to 225bp this cycle after a 25bp cut in May and April. “We hope that the authorities keep the door open to additional measures and reiterate that future decisions will depend on new data,” they detailed.
