MercoPress. South Atlantic News Agency

Argentina: July's CPI projected below 2%

Analysts believe that a significant rise in the rate between the US dollar and the Argentine peso did not have a major impact on prices

According to the Market Expectations Survey (REM) from Argentina's Central Bank (BCRA), which collects projections from consulting firms and research centers monthly, inflation in July is expected to be 1.8%, a slight increase from June's 1.6%. This figure is foreseen despite the dollar rising 14% during the same month.

Private consulting firms and a Reuters poll project a July inflation rate between 1.7% and 1.9%. The official data will be released by the National Institute of Statistics and Census (Indec) on Wednesday. The consulting firm EcoGo estimated inflation of 1.7% for July. C&T indicated that the cost of living would have risen by 1.9%.

The minimal increase is attributed to seasonal factors, such as winter vacations, which led to higher prices for tourism-related items. Other factors include increases in some regulated prices (like fuel and public services) and the payment of mid-year bonuses.

Analysts believe that a significant rise in the rate between the US dollar and the Argentine peso did not have a major impact on prices, which has led to a debate among economists about the effectiveness of the government's monetary policy of keeping the monetary base fixed.

Some experts argue against measuring the monetary base in real terms and highlight that the nominal amount of pesos continues to rise, which could still lead to inflationary pressure.

“Who was the ignorant person who invented the idea that the evolution of the monetary base should be measured in constant pesos?”, Economist Roberto Cachanosky wondered on X.