According to Argentina’s statistical office (INDEC), consumer prices rose by 2.8% MoM in April, down from 3.7% MoM in March. The print was well below the central bank survey median of 3.2% MoM. Thus, monthly inflation decelerated despite the depreciation of the ARS after the elimination of capital controls by mid-April. On an annual basis, inflation declined to 47.3%, from 55.9% in March helped by an annual base effect. Annualized quarterly inflation in April rose to 42.2%, up from 38.9% in the previous month.
The monthly core measure rose by 3.2% MoM in April, unchanged from the previous month. Moreover, the annual core reading fell to 46.9%, down from 51.3% in March. Prices for regulated products increased by 1.8% MoM and 57.4% YoY. Finally, prices for seasonal products increased by 1.9% MoM, with the annual reading falling to 33.5% in April, from 44.0% in the previous month.
Our take: We expect the disinflation process to continue in the coming months with headline inflation falling to 30.0% by year-end due to a lower-than-expected pass-through following the lifting of capital controls in April. The INDEC will release CPI for the month of May on June 12.