According to UMET’s Institute of Workers Statistics (IET), labor inflation was above double-digit percentages in August, reaching 10.7 percent. In eight months, the price increase amounted to an increase of 81 percent and climbed to 121.5 percent compared to the previous year. If inflation averaged 10.7 percent per month in the remaining four months of the year, it would reach 171.8 percent this year. However, if one were to follow the January-August average (7.7 percent monthly), the cumulative deviation in 2023 would be 143.5 percent.
Acceleration of inflation “closely linked” to the devaluation after STEP
Likewise, the IET specialists explain in the document that “the acceleration of inflation in August was closely linked to the post-PASO devaluation jump (22%).” In an economy with strong inflation inertia and high volatility, the transfer to devaluation prices tends to occur faster, which is why in Immediate observations were noted in virtually all areas. It should be borne in mind that inflation in the first half of the month (before the devaluation jump) ran at a relatively similar pace as in previous months (between 7 and 8%). This made it possible to mitigate the magnitude of the August increase, which is partly calculated in September due to statistical carryover.”
The base basket with numbers similar to the 1990 hyperinflation
“All chapters in the basket rose over 7% in August, something not seen since the end of hyperinflation in 1990,” the report said. According to the IET measurement, “the leisure and culture chapter is the strongest increase at 14%, driven by the increase in electronics (notebooks, for example, rose by 33%), the price of which is usually closely linked to the dollar.” The second chapter with The highest increases were in transportation (13%), followed by health (12.7%). Food and beverages, which carry the most weight in the basket, rose 9.8%, driven by herbal teas, meat, dairy and fruit, all with double-digit increases. The chapter with the lowest increases was education at 7.4%.”
The second half of the report analyzes how true it is that the current social situation, given the inflationary conditions, is comparable to that of the crisis of 2001-2002, as is often claimed in public discourse. “To do this, historical series are analyzed in terms of variables such as employment, unemployment, real wages, poverty and inequality. “The conclusion is that although some of these variables (mainly real wages and poverty) have deteriorated significantly in recent years, the current values are in no way comparable to those of 2001-2002,” say the experts.