Figures coming in from private consulting firms in Buenos Aires would suggest that the government is close to reaching its target of a 1.5% monthly inflation rate, with estimates ranging between 1.6% and 2% for price increases in November. In an article released in La Nacion, economic experts have pointed to the transport and food sectors as the principal causes for inflation rates this past month and have given their thoughts on the effects of the US dollar’s growth, among other factors on the future of inflation rates next month and beyond.

inflation summary

Both core and general inflation are close to reaching the 1.5% target established by Federico Sturzenegger

Marina Dal Poggetto, the executive director of Estudio Bein estimated a rise in prices of between 1.8 and 1.9% last month, specifically owing to increased subte rates (now at $7.50 per journey) and a rise in the prices of gas, cigarettes and taxis, adding that the food sector has an inflation rate of 1.9%. If the current price of the dollar relative to the Argentine peso stagnates, “there shouldn’t be any upward pressures on inflation,” the economist added.

Orlando Ferreres gave the same figure of 1.8% for November inflation rates and claimed that rates would follow a similar pattern in the coming months. “All the numbers on core inflation, tariff-rates and seasonal goods had a slight tendency towards downswing and that’s going to continue into 2017,” claimed economist Nicolas Alonso. With that in mind, he estimated that the average annual interest next year should be around 25%.

However, “that estimate depends on various assumptions related to tariff adjustments in April and the change in relative prices,” explained Alonso. “While we do indeed see a downswing, we have discrepancies with the targets of the Central Bank of Argentina.”

FIEL gave a slightly higher estimation of inflation rates for November at 2%. “Core inflation has been relatively high over the past few weeks, averaging around 1.6%,” explained their chief economist Juan Luis Bour. Bour added that general prices in 2017 are “likely to depend more on adjustments in the prices of services, including wages, than on what happens with exchange rates.”

Consultancy firm Elypsis, on the other hand, estimated November’s inflation rate at 1.6% for the city of Buenos Aires and 1.5% for Greater Buenos Aires. The difference, the firm explained, is linked to the impact in price surges in the subte and taxi tariffs in the city. With these new figures, the firm’s chief economist, Gabriel Zelpo, estimated that average annual inflation this year would be 41% for the city of Buenos Aires and 38% for Greater Buenos Aires. Zelpo also stated, in accordance with FIEL, that the relentless growth of the dollar, which yesterday rose above AR $16 to 1 USD, will not be a determining factor for inflation rates in the coming year.

Meanwhile, Diego Giacomini, the head of Economía y Regiones, gave a 1.8% estimate for November and projected a rate of 1.6% for December. That means a 40.9% annual inflation rate, according to Giacomini, who also stated his belief that Central Bank’s downward adjustments to interest rates will prevent inflation from lowering to the 1.5 percent predicted by the government. “Up until October Central Bank applied a prudent economic policy that successfully reduced inflation to a monthly rate of 1.6 or 1.7 percent, but they never reached their target,” declared Giacomini.

Last of all, Ecolatina estimated that inflation rates in November were around 1.7%. Lorenzo Sigaut Gravina, the firm’s chief economist, unlike his fellow experts, that the growth of the dollar could have a detrimental impact on inflation rates. “If the dollar grows beyond AR $16, there’s the risk of a serious price hikes,” warned Sigaut Gravina.