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We recently lowered our inflation forecast to 160% for YE24 (from 180% previously).
2024/05/14 | Andrés Pérez M. & Diego Ciongo



Consumer prices rose by 8.8% MoM in April (from 11.0% in March), slightly below market expectations of 9.0%, according to the latest central bank’s survey. Thus, monthly inflation returned to single-digit readings for the first time since October 2023. Annualized quarterly inflation decelerated to 250.8% during the quarter ended in April, from 428.8% in March. The 12-month inflation reading rose to 289.4%, from 287.9% in March.

 

The monthly core measure decelerated further in April. The core index rose by 6.3% MoM (from 9.4% in the previous month), bringing the year-over-year reading to 292.2% in April 2024, from 300.0% in March. Prices for regulated products increased by 18.4% MoM and 344.1% YoY, led by increases in electricity and fuel prices amid the removal of subsidies. Finally, prices for seasonal products increased by 9.9% MoM (from 11.1% in the previous month) and 213.5% YoY.

 

 

Our heatmap shows that 83% of selected items (taking the month-over-month readings) rose at single-digit in April, from only 8% in December 2023.  

 

 

Our Take: The appreciation of the currency and weaker consumption driven by the sharp contraction in real wages, contributed to the deceleration in monthly inflation. We recently lowered our inflation forecast to 160% for YE24 (from 180% previously). We also reduced our policy rate forecast for YE24 to 40% from 70%.