INDEC will announce September inflation: will it be able to break through 4%?

INDEC will announce September inflation: will it be able to break through 4%?
INDEC will announce September inflation: will it be able to break through 4%?

This Thursday the INDEC will announce the information of september inflation. Most consulting firms and private financial entities estimated that prices increased less than 4% during the past month; If this is confirmed, it would be the lowest figure so far in Javier Milei’s presidency.

According to the latest Market Expectations Survey (REM) of the Central Bank (BCRA), the median of the private sector estimates for September inflation was 3.5%. However, it is worth remembering that for August the participants had predicted 3.9%, when the official number ended up being 4.2%.

The effect of the reduction in the PAIS tax

Most analysts agree that the reduction of ten percentage points in the COUNTRY Tax contributed significantly to the inflationary slowdown.

“In the second week of the month there was a significant moderation in the pace of price increases, linked especially to the goods component, which suggests a favorable impact of the reduction of the PAIS tax,” they highlighted from the C&T consultant led by María Castiglioni and Camilo Tiscornia.

The sectors that most drove inflation in September, according to C&T, were Transportation and Communications due to the residual effect of the increase in tickets in the Buenos Aires Metropolitan Area (AMBA), in mid-August in the case of buses, and in September for trains. Also highlighted was the increase in above average, due to medication adjustments and prepayments. Food and drinksFor their part, they rose 3.2% monthly, slightly more than in August.

For its part, the consulting firm that usually comes closest to the final data, Eco Goprojected that inflation would be 3.5%, with a sharp rise in regulated inflation (+4.2%), while seasonal inflation increased 1.2% and the core, which discounts the two previous variables, increased 3.7%, 0.1 pp below the previous data. This consultancy agreed that the increase in regulated prices was due to the increase in the price of fuel, transportation and prepaid bills.

What inflation does the market expect for the coming months?

For the following months, The forecasts remain far from the path promoted by the Governmentwhich seeks to converge as quickly as possible to the 2% monthly devaluation. The REM predicts that inflation will be 3.4% in October, that it will drop to 3.3% in November, that it will rebound to 3.6% in December and that it will mark 3.4%, 3.3% and 3% in January, February and March, respectively.

By October it is expected that the reduction in summer gas rate validated by the Government and the drop in fuels due to the lower international oil price can help the inflationary deceleration process continue.


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