According to the National Institute for Statistics and Census (INDEC), year-on-year inflation hit 104.3% in March, while consumer prices rose by 7.7%  — the highest monthly figure since April 2002.

The total inflation for the first three months of the year was 21.7%, according to the report published today.

Education prices saw the highest increase and the biggest influence on the index, with a 29.1% monthly inflation rate. The price hikes, which were 21.4 percentage points than the general index, were caused due to the start of the school year, according to the INDEC.

“Clothing” and “food and and non-alcoholic beveragesdrinks” —where the hike was caused mainly by meat, dairy products and eggs— followed suit, with 9.4% and 9.3% monthly increases respectively.

The two sectors that rose the least in March were culture and recreation –which includes books, magazines, newspapers and cultural events ticket prices– (4.4%) and communications — which includes telephone and internet bills — (1.9%). 

Last November, Economy Minister Sergio Massa said he hoped for a slow but steady reduction of inflation, with a monthly rate below 4% by April. Instead, in the last five months, inflation has been steadily on the rise — consumer prices increased by 4.9% in November, by 5.1% in December, by 6% in January, and by 6.6% in February.

In its 2023 budget, the Economy Minister forecast a 60% inflation rate for the entirety of 2023. To reach that goal, monthly inflation would have to average 3.1% until December. However, price increases have not been that low since November 2021, according to the INDEC.

This week, the International Monetary Fund (IMF) detached itself from Massa’s forecasts, increasing the projected yearly inflation for the country from 60 percent to 88 percent. 

Inflation was higher than expected by most of the private sector. The Central Bank’s Market Expectations Survey (REM), which averages forecasts from different consulting agencies and banks, predicted a 7% average inflation for March and 110% for the entire year.

Inflation measured at the local level has also been on the rise. The official statistics institute in Buenos Aires City said prices rose 7.1% in March, while the one in Córdoba said the monthly inflation was 7.99% — the highest in 21 years.

“Inflationary acceleration not only impacts the government’s need to recover some ‘political capital’ in the run-up to the [2023 presidential] elections,” said a report by business consulting firm Ecolatina, “but it also generates greater pressures to accelerate the crawling peg [the peso depreciation against the US dollar] and to raise interest rates, making the scenario more unstable.”

Ecolatina predicted in its March report that, despite inflation decelerating in April (but not below 6%), inflation for 2023 will surpass 100%.