MercoPress. South Atlantic News Agency

Argentina: July's inflation reported at 6.3%

According to Indec, salaries in June narrowly beat inflation

Argentina's National Institute of Statistics and Census (Indec) announced Tuesday that the variation in the Consumer Price Index (CPI) for the month of July of 2023 was 6.3% for a total of 60.2% in the first seven months of the year and 113.4% interannually, it was reported in Buenos Aires.

The item with the highest increase was communications, with 12.2% due to a rise in telephone and internet fares. Second was recreation and culture, with an increase of 11.2%, mainly due to increases in winter holiday packages, followed by alcoholic beverages and tobacco, with an increase of 9%.

While food and non-alcoholic beverages went up 5.8% globally, the prices of bread and cereals rose notoriously above average, together with meat byproducts.

The lowest variations were recorded in housing, water, electricity, gas, and other fuels (4%), clothing, and footwear (3%).

July's inflation reversed a downward trend after June's 6%, May's 7.8%, and April's 8.4%.

According to Indec, salaries in June narrowly beat inflation. However, in the first semester of 2023, workers were still lagging with accumulated adjustments between 41% and 50.2%, thus averaging 47.2% or 3.5 percentage points below the 50.7% increase.

In interannual terms, the items with the highest impact on their prices were restaurants and hotels with 129.7%; followed by alcoholic beverages and tobacco with 120.6%; communication with 119.3%, and food with 116.3%.

Unlike previous months, in July there was no Relevamiento de Expectativas del Mercado (REM) (Market Expectations Survey), Central Bank's survey among private consulting firms to forecast what will happen with the main variables of the economy, citing electoral restrictions. The move also sought to benefit Economy Minister and presidential candidate Sergio Massa for the Open, Mandatory, and Simultaneous Primary (PASO) elections.

After Monday's 22% devaluation of the peso, inflation in August is expected to be above 10%, according to financial analysts in Buenos Aires.

So far this year, inflation in Argentina has most strongly affected hospitality at 69.1%; education at 67.7%; communication at 66.8%; and recreation and culture at 66.5%, while food prices increased, by 64.5% in the first seven months of the year, followed by healthcare (60.7%).