Monthly inflation in Argentina accelerates to 1.9% in July

Argentina's National Institute of Statistics and Census (INDEC) released inflation figures for July, which rebounded from June to 1.9%, resulting in a cumulative year-over-year increase of 17.3%. In the year-over-year comparison, the increase reached 36.6%.

The division with the greatest increase in the month was Recreation and Culture (4.8%), followed by Transportation (2.8%), due to increases in Public Transportation and Operation of Personal Transportation Equipment.

The division with the highest incidence was Food and Non-alcoholic Beverages (1.9%), due to increases in Vegetables, Tubers, and Legumes, Meat and Meat Products, and Bread and Cereals in the GBA, Pampeana, Northeast, Northwest, and Cuyo regions. In contrast, in Patagonia, the highest incidence was in Transportation (2.8%).

The two divisions with the smallest variations in July were Alcoholic Beverages and Tobacco (0.6%) and Clothing and Footwear (-0.9%). By category, Seasonal prices (4.1%) led the increase, followed by Regulated prices (2.3%) and Core CPI (1.5%).

Despite the increase, Milei and Caputo valued the figures

Despite the increase, Minister Luis Caputo and President Javier Milei valued the core inflation figure, the lowest since January 2018. "Core inflation at 1.5%...!!! Luis Caputo, thank you very much for being the best economy minister in history by far...!!!", wrote the president on his X account.

"The three-month moving average of headline inflation was below 1.7%, the lowest since November 2017," Caputo added, as another "positive" piece of data to keep in mind. Generally speaking, the most renowned private consulting firms estimated that the rise in the dollar in July (the official rate accumulated $165 in one month) would not have a noticeable impact on the CPI. In fact, according to the surveys, two of the leading consulting firms agreed on a projection for food and beverages that would bring relief to the government, which aimed to keep inflation below two percentage points.

Regarding food and beverages, the consulting firm Eco Go indicated that "virtually no changes were recorded (+0.03%) during the fourth week of July, marking a slowdown of 0.4 percentage points compared to the previous week."

"With this data, inflation for food consumed at home would rise to 1.5% in July," they calculated. When incorporating increases in food consumed outside the home, which reached 3.4%, the total indicator for the month stands at 1.8%.

The consulting firm LCG reported that during the fifth week of July, surveyed food and beverage prices showed a 0.4% weekly drop. The previous week, they had fallen 0.2%.

Regarding S&T, they estimated a monthly CPI of 1.9%. With this figure, the twelve-month variation fell from 38.8% to 35.5%.

Regarding July's figures, they considered that price dynamics were influenced by seasonal factors. "Especially those linked to tourism, which peaked during the winter holidays," they indicated. Added to this was a very sharp increase in vegetables, they noted, "the highest since last March." It's worth noting that inflation in Buenos Aires also accelerated in July, reaching 2.5% in the Autonomous City of Buenos Aires.