Released in the second or third week of the month, the report analyses recent inflation dynamics and forecasts in Argentina. The country has a long-standing history with inflationary issues. Inflation has often been double-digit since the country became independent from Spain in 1816 but it had declined to single digits in the 1990s amid a currency board. Inflation returned when the currency was allowed to float in the early-to-mid 2000s and the country exhibited double-digit inflation again since 2015 and likely before (although official data are lacking for part of the 2000s). High and volatile inflation may hinder the economy. Business confidence and investment may be impaired as it makes it difficult for agents to project costs and income, altering the expected return of an investment.
Inflation also leads to higher dispersion of prices among economic sectors and items, leading to volatility in relative prices. Savings may be deterred, encouraging agents to protect themselves via portfolio dollarization and the purchase of durable goods, among others. Moreover, when inflation accelerates, it can lead to a decline of international competitiveness, which is detrimental particularly for manufacture exports. In this regard, the Report analyses medium-to-short term inflation dynamics in Argentina, covering the evolution per component (seasonal, core and regulated) and item (transport, communication, education, etc.). It also disentangles the main drivers of inflation (public support programmes, impact of the Covid-19 pandemic across sectors, etc.) and presents inflation forecasts by analysts as reviewed in Central Bank surveys. Keeping abreast of the latest developments regarding inflation will help you to optimise your business decisions in Argentina.
