“When will there be a respite? When the inflation issue is controlled and, subsequently, we grow again. Inflation is already going down. December came in at 25%; January, by 20%; and February, below 20%,” said the Minister of Economy, Luis Caputo. The statement, however, raises certain doubts among analysts who claim that, due to the rise in transportation and energy in recent days, the Consumer Price Index could be above official estimates.
This week, the Government made official a series of increases that have a full impact on the pocketbook. Firstly, the Ministry of Transportation confirmed that as of this Tuesday the bus fare in the AMBA began to cost $270, which represents an increase of 250% in relation to the previous values, while the minimum train fare reached $130.
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This is in addition to the increase that the Government announced in the wholesale price of electricity service. Starting in February, there will be rate increases of up to 120% for higher-income sectors or those that did not ask for subsidies, called Level 1. As TN learned, this category is made up of 5,327,173 users.
These increases, especially in transportation, will have an impact on the inflation figures for the current month. “The increase in buses would imply a floor of 10 points in February. We could think of a monthly inflation of around 22%,” they pointed out from the consulting firm LCG. And they warned that so far, the transportation sector “today is the item that contributes the most – to general inflation – alone.”
The Government enabled an increase in the AMBA train and bus fare. (Photo: Agustina Ribo / TN).
Along the same lines, Guadalupe Birón, economist at the consulting firm Empiria, explained that if the increases in transportation are taken into account, not only in AMBA, but also in the rest of the regions, added to gasoline, prepaid and telephone services and Internet, the incidence reaches 8.6%.
“We assume that the inflation rate for February will be in line with January, perhaps a little below, but with this pace of regulation we do not see a sudden slowdown likely,” he said.
For its part, the consulting firm Eco Go estimated that the inflation figure for the second month of the year will be around 14.1%. “Inflation in the first quarter was facing a segment of the year with strong inflation similar to that of December. However, the increases in regulated prices are hindered by precautionary measures and timid progress when it comes to removing subsidies. If this trend continues, the return of single-digit inflation that we initially believed could arrive in May will be delayed,” he considered.
What Luis Caputo said about February inflation
The Minister of Economy, Luis Caputo, anticipated that the numbers that the economy is presenting in terms of fiscal adjustment are better than what most analysts expected.
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Regarding the escalation of prices, Caputo assured that it is already decreasing and moderating and shared the figures, although the official data for January will be published by INDEC on Wednesday of next week.
“When the inflation issue is controlled and, subsequently, we grow again. Inflation is already going down. December came in at 25%; January, by 20%; and February, below 20%,” she said.