Consumer prices rose by 7.8% mom in May (from 8.4% in April), below market expectations of 9.0% according to the central bank survey. The annualized quarterly inflation rose to 151.3% in the quarter ended in May (from 140.3% in April). The 12-month inflation reading came in at 114.2%.
Core inflation came in also at 7.8% in May (down from 8.4% in April), helped by a deceleration in food and non-alcoholic beverages. Annualized core inflation stayed almost unchanged at 145.5% in the quarter ended in May. Prices for regulated items rose by 9.0% mom and 105.3% yoy, led by energy tariff adjustments and medical services. Prices for seasonal products rose by 6.0% mom and 149.1% yoy.
We recently raised our inflation forecast for this year to 175% from 125%, as we now expect a meaningful official real exchange rate depreciation before the end of this year (in our previous scenario we were assuming adjustments would only come in 2024).