Photo via Mdzol

Consumer consumption in Argentina will drop by at least four percent in the first semester compared to the same period of last year, according to private analysts. The observed behavior is thought to be linked to the fact that, on average, salaries grew seven percentile points less than the yearly inflation rate. This loss in purchasing power has driven most households to reduce how much they buy from supermarkets and stores, being much more careful at the time of choosing what to buy.

“Households are consuming less of basic products: milk, mayonnaise, soft drinks. They control what they buy much more and abandon dispensable products,” head of Kantar Worldpannel consultancy firm, Federico Filiponni told Cronista.

Filipponi went on to provide the figure that perhaps best illustrates the households’ need to prioritize, saying that these purchases represent “between eight and ten percent of their monthly expenses, when a few years ago the number was closer to four.”

The government expects numbers to start picking up as of June, mainly as a result of a combination of two factors: that most workers will receive their first salary increase of the year agreed on their respective wage negotiations carried out at the beginning of the year — they usually get a second one in either September or October; And the fact that, if the expectations of the government’s economic team are met, inflation should sensibly decelerate for the second month in a row: they expect May’s rate will clock in at 1.6 percent or less, and June’s to be around 1.2 percent.