After practically a semester of continuous absence, the INDEC once again published data about the evolution of inflation in the Buenos Aires Metropolitan Area (AMBA).

The publication can be consulted on the organization's page at the following [link]. The official report shows not only the evolution of the general index, but also the main surveyed media.

The latter, added to the low discrepancy in the evolution of the index in relation to private measurements, provides a positive signal to the recovery of confidence in official measurements.

In this way, the General Level of the Consumer Price Index for the Autonomous City of Buenos Aires and the districts that make up Greater Buenos Aires, registered a variation of 4,2% in the month of May in relation to the previous month.

This is a high level of inflation, much higher than that observed last year. In fact, considering the evolution of the uninterrupted series of the Congress CPI, in the last six months there has been an accumulated price increase of 28,4%; which is equivalent to an annualized increase of 65%.

Given the interruption in the publication of the series, the following graph shows the percentage growth of the index month by month. As can be seen, April was the most worrying in terms of inflation so far this year.

For that month, the Congress CPI registered an increase of 6,70%; while May showed a strikingly smaller increase than that published by INDEC: 3,50% month-on-month.

In the first months of the year, the acceleration in prices has been largely caused by the devaluation of the peso and the increase observed in public service rates. To illustrate this point, the following graph shows the evolution of prices in CABA.

In it, a considerable acceleration in prices is observed in the last six months compared to the previous semester, in all segments. However, the items associated with public services stand out especially, due to increases in the rates of water, gas, electricity and transportation services; and in alcoholic beverages and tobacco.

Having made the increases in the utility rates, a slowdown in inflation is to be expected in the coming months. However, the increase published by INDEC in May continues to show a high variation in the price level.

As in the first months of the year, the increase recorded in May is largely explained by the growth of regulated goods and services. In this regard, the following graph shows the evolution of prices classified into three categories according to INDEC.

El grupo regulated contains, “goods and services whose prices are subject to regulation or have a high tax component: fuel for housing, electricity, water and sanitary services, health systems and auxiliary services, public passenger transportation, operation and maintenance of vehicles, mail, telephone, formal education and cigarettes and accessories. This category represents 19,4% of the total CPI basket”

On the other hand, the group seasonal contains fruits, vegetables, outer clothing, transportation for tourism and accommodation, and excursions. This category represents 10,8% of the total CPI basket. Finally, the Core IPC It groups the remaining groups of the CPI, which represent 69,9% of the total CPI basket.

As can be seen, regulated services show a much higher evolution than the general CPI. On the other hand, the core inflation, which shows the evolution of the set of goods not affected by seasonal movements or regulated prices, was 2,7%.

Even so, it must be taken into account that even within the core CPI category, increases can be observed that can be explained by current circumstances. These are dairy products (+17% cream cheese, +8,9% whole milk in sachets) and regular wine (+20,2%).

In the first case, the increase is explained by the floods that affected the south of the province of Santa Fe and led to a drop of almost 19% in primary production in the month of April. The result was a sharp increase in the price of milk paid to the producer, which was passed on to the consumer. In the case of wine, the increase is also affected by a poor vine harvest in the Cuyo area, affected both by climatic issues and by the attack of the vine moth.

These data are what provide greater expectations of a slowdown in inflation. Strictly speaking, it should be taken into account that price indices are not an accurate reflection of inflation. Conceptually, they are a measure of the evolution of the purchasing power of salaries, which is eventually used as an approximate variable of the evolution of the phenomenon. T

taking into account this consideration, which applies not only to the new CPI, but also to the previous and alternative ones; The current level of inflation in our country continues to be among the highest in the world.