According to Argentina’s statistical office (INDEC), consumer prices rose by 3.7% MoM in March, up from 2.4% MoM in February and 2.2% MoM in January. The print was well above the central bank survey median of 2.6% MoM. While the disinflation trend has been non-linear since the beginning of last year, this is the first time that the monthly CPI reading has accelerated for two months in a row. On an annual basis, inflation declined to 55.9%, from 66.9% in February helped by an annual base effect. Annualized quarterly inflation in March rose to 38.7%, up from 33.4% in the previous month.
The monthly core measure rose by 3.2% MoM in March, accelerating from the previous month (2.4% MoM) driven by higher meat prices. Moreover, the annual core reading fell to 51.3%, down from 60.4% in February. Prices for regulated products increased by 3.2% MoM and 83.1% YoY, led by education prices. Finally, prices for seasonal products increased by 8.4% MoM due to higher tomatoes prices, with the annual reading falling to 44% in March, from 47.6% in the previous month.
Our take: We expect the disinflation process to resume in the coming months with headline inflation falling to 25% by year-end, well below the 117.8% yoy inflation in YE24. However, our forecast has upside risks given the recent higher-than-expected prints and the potential exchange-rate regime included in the new IMF program. The INDEC will release CPI for the month of April on May 14.
Andrés Pérez M., Diego Ciongo & Soledad Castagna