:quality(85)//cloudfront-us-east-1.images.arcpublishing.com/infobae/EHXZY4KWFOB74S3MCAJD6JMB2U.jpg "Inflation increases in Argentina and decreases in the region: what is the gap with the rest of the countries")
While in most Latin American countries there is a slight decrease in food inflation, in Argentina there is an acceleration process, according to a report by the Institute for Argentine Reality Studies and Latin American (Ieral) of the Mediterranean Foundation.
The Central Bank kept the interest rate unchanged despite rising inflation
The monetary authority maintained at 75% annual nominal the yield paid by the bonds it places with financial entities and that received by savers for their fixed-term investments.
According to the data collected, last year local food inflation averaged 5.7% per month, while in a sample of 10 Latin American countries it was 1%. Local inflation was 5.7 times higher than inflation in the region.
This situation persists at the start of 2023: local food inflation stood at 6.8% in January, while the region recorded 0.9%. “In this first month of the year, the interest rate differential widened, with local inflation being 7.7 times higher than that of the region; This difference in levels becomes more striking compared to certain countries, for example it reaches 13 times if it is measured compared to Brazil, 10.1 times compared to Peru and 9.3 times compared to Bolivia”, details the report.
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“In Latin America, inflation averaged 1% per month in 2022, decreasing slightly to 0.9% in January 2023, i.e. from an annualized rate close to 13%, it is passed at a rate of 11%; On the contrary, in Argentina the average rate fell from 5.7% to 6.8% per month, from an annualized rate of 94.5% to another of 120.2%,” they pointed out.
One of the explanations of the report is that in controlling food inflation that we observe in the region, in addition to the fiscal and monetary policy efforts that governments can make, the great stability of several of the currencies of the region (with nominal revaluation in most cases) and the deflation of international prices of agricultural raw materials and basic food products, which began in April 2022 and has accumulated a decline of 17.2% since then.
In 2022, all of Latin America had higher levels of food inflation than in 2021. From an average monthly rate of 0.6% (median value of 10 countries), it fell to a monthly rate of 1% . In Argentina, this phenomenon intensified, with inflation rising from 3.5% to 5.7% per month.
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Last year, the gap between the local inflation rate and the regional inflation rate was 5.7 times on average. At the beginning of 2023, the gap widened and the local rate was 7.7 times higher than that of the region. “While there is a relative stability of food inflation in Latam, which extends to virtually all countries (except Colombia and Uruguay), the same is not true in the Argentine case, where there has been a significant acceleration of the same,” they noted. And they highlighted the concern over January 2023 inflation data.
“International agricultural and food commodity prices showed significant increases through much of 2021 and even into early 2022, but from April last year the trend reversed and prices went up. started falling sharply persistently,” they said. recalled.
“The basket monitored by the FAO (United Nations), which contains a mixture of international prices for meat, dairy products, oil, cereals and sugar, the value of which had increased by 19% in the first 3 month of 2022, recorded declines over the following 10 months (from April 2022 to January 2023), accumulating a 17% decline over this period,” they said.
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