CABA inflation jumped to 11.9% in November

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The inflation rate in the city of Buenos Aires increased to 11.9% in November and returned to double digits after October marked a slowdown of 9.4%. In this way, in the first 11 months of the year, an increase of 146.4% was accumulated, and in the interannual trajectory, it stood at 160.6% (+14.2 percentage points more than the previous month).

The main increases occurred in the following categories: “food and non-alcoholic beverages (14.2%), restaurants and hotels (12.4%), and housing, water, electricity, gas, and other fuels (12.4%). Goods registered an increase of 13.6%, and services, 10.7%. Core inflation reached 12.7%.

“We warn that the strategy of “managing” prices, which in practice means controls and freezes, further disturbs the deteriorating macroeconomics. No doubt the consequences will be projected in the coming months,” he said. Jose Maria Donati, general director of the General Directorate of Statistics and Censuses (DGESYC) of the City Government.

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Caba Inflation Jumped To 11.9% In November

During November, the change in the IPCBA basically responded to the increases in the following divisions: food and non-alcoholic beverages; housing; water, electricity, gas, and other fuels; restaurants and hotels; health; and transportation, together, which explains 67.0% of the increase in the general level.

Regarding the food category, the biggest drivers of the increase are bread and cereals (16.3%) and meat and derivatives (12.9%). They are followed by the importance of vegetables, tubers, and legumes (17.1%), milk, dairy products, and eggs (9.4%), and fruits (20.6%).

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In the case of the housing sector, the increase in rents and common household expenses. Conversely, the fall in residential electricity service rates contributed to taking the pressure off this division promoted by the statistical center.

The most interesting point of the report states that in year-on-year terms, the housing, water, electricity, gas, and other fuel divisions, food and non-alcoholic beverages, and restaurants and hotels were mainly responsible for the increase in retail prices, which explains 51.3% of the interannual change in the general level.

Inflation in CABA: the causes of price acceleration

“As we expected, inflation in November confirmed that the slowdown observed in October was only temporary based on (1) the government’s strategy of including price increases in the run-up to the election through various freezes (exchange rate, public service rates, fuel), with agreements to stop the dynamics of the increase in things like prepaid bills and medicines; (2) certain fatigue of transfer prices from post-STEP devaluation; and (3) the largest exchange calm in the weeks after the general election,” stated Santiago Manoukian, economist and Head of Research at the consulting firm Ecolatina Scope.

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In this framework, he maintains that the acceleration in November will respond to the “drag” of the mid-October price acceleration. Among the reasons, he detailed: “the generalization of the exchange rate split at the end of October; some additional fuel due to the recent return of the creeping peg; the strengthening of payment restrictions in imports in recent weeks; deepening uncertainty about replenishment costs; and the beginning of the removal of price agreements faced with an exit from the government that has lost control power, with “threats” that are no longer credible,” added the economist.

Inflation: what to expect for December

According to the survey of C&T Consultores, the inflation at the national level is at 11.5%, which is close to the data provided by the city and predates what will be announced by INDEC on December 13. In this sense, its director, Camilo Tiscornia, stated that it was confirmed that the core inflation was more than 12% and showed the decrease in October as “transitory.”

“Obviously, the inflation is more than 10%, and now in December it will be severe. It has been seen, I tell you, and I expect that in the first days that we see in December, there will be a very strong increase in the first week, where the month promises that inflation will be greater, I believe, than what it was last month,” said Tiscornia.

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In this sense, the LCG consultant published this afternoon the survey for the first week of December, which marked an acceleration of 4.1 pp compared to last week. Growth averaged 12.3% over the past 4 weeks and ended at 17.5% over the same period.

For his part, Jorge Colina, an economist from IDESA, contributed that the inflation data of CABA “is something to be expected, even at the national level.” “If food doesn’t grow much, because it grew a little last month, that’s when the rate falls a little bit, which is what happened in October. But you know, when the rate falls a little bit, like in October, you know—”Next month, the food will recover, and then the rate will go up again. What is 12%? It proves that the national inflation, that is, that of the INDEX, will be between 10 and 12%.”

This leaves an indication that December inflation is unlikely to reach double digits again.