Post-devaluation inflation: prices up 10.8% in Buenos Aires City

It’s the highest recorded figure since the city government began tracking the local rate in 2011

Monthly inflation for Buenos Aires was 10.8% in August, according to the city government’s first price index since last month’s 22% devaluation of the peso. It is the highest monthly figure since the government began tracking inflation in 2011, surpassing July’s price hike by 3.5 points

The new data show that inter-annual inflation in the capital was 127.3%, up significantly from 117.9% in June. Prices in the city have risen by 79.8% in 2023 to date.

These increases were driven by multiple sectors, including housing, utility, and fuel; food, drink, and hospitality; as well as health and transportation, the Buenos Aires city government’s General Directorate of Statistics and Census (DGESYC, by its Spanish acronym) wrote in its monthly report.

Housing prices went up by 13.8%, mainly due to increases in rental prices and water bills. Food and drink jumped 12.5%, while meat and derivatives soared by 19.2%, vegetables by 15.9%, and bread and cereals by 10.4%.

Health costs were up 10.8%, thanks to increases in the prices of health insurance and medication.

The consulting firm Ecolatina detected that inflation was climbing even before the post-primary devaluation. In the first two weeks of August, Ecolatina measured an 8% price increase due to the impact of the fiscal devaluation at the end of July, the acceleration of the crawling peg (the gradual depreciation of the Peso), the rise in parallel exchange rates, and beef price hikes.

The August 13 devaluation created  a “shock that added further uncertainty to the already vulnerable situation.” Ecolatina noted that the measure was not “part of a comprehensive plan” and that its pass-through on prices was high and immediate.

“The devaluation, rather than clearing the picture, constituted yet another element that added uncertainty to the macroeconomic panorama, once again unanchoring inflationary expectations,” the report said.

Ecolatina, which measures inflation for the Greater Buenos Aires region, calculated an 11.2% price hike for August. The consulting firm expects double-digit inflation for September as well.

“Going forward, we expect the nominal rate to remain high and volatile in the face of macroeconomic fragility, the absence of anchors, and electoral uncertainty, with inflation closing 2023 at a 160% minimum,” the report said.

Consulting firms also expect double-digit inflation nationally for August. Eight consultant agencies have projected that the August rate will be between 10% and 15%.

In July, the Central Bank stopped publishing the monthly market expectation survey (REM, by its Spanish acronym) on inflation ahead of the figure’s release by the National Institute for Statistics and Census (INDEC). The REM, which averages a variety of economic projections forecasted by 45 consulting agencies and banks, will only be known on September 13, the same day that INDEC publishes the official inflation number.


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