Itaú BBA - ARGENTINA – Higher-than-expected inflation in November

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ARGENTINA – Higher-than-expected inflation in November

Dezembro 12, 2019

Inflation to hit a record high in 2019.

The rise in consumer prices was higher than expected in November, likely due to preemptive hikes. The CPI increased by 4.3% mom, up from 3.3% in October. The figure exceeded the Bloomberg consensus forecast of 4.0%.  Last-twelve-month inflation hit 52.1% in November, up from 50.5% in the previous month. Annualized inflation for the moving quarter accelerated to 69.0%, up from 67.1% in the quarter ended in October. 

Core inflation also accelerated in November, but was below the headline reading. Core item prices rose by 4.0% mom, led by food items, despite exchange controls (5.3% mom). The jump can likely be attributed to the risk of price and wage controls under the new administration’s so-called social pact. At the margin, the core reading decreased to an annualized 74.1% (last three months), down from 78.4% in October. Last-twelve-month core inflation increased to 55.2% in November, from 54.1% in the previous month. Regulated prices rose by 3.8% mom, led by services (communications, health and education), while prices for seasonal products increased by 7.3% mom.

Inflation to hit a record high in 2019. We forecast 55% year-over-year inflation for December 2019, the highest level in 28 years.

Juan Carlos Barboza
Diego Ciongo

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