Background on Inflation and its Impact
Inflation in the Autonomous City of Buenos Aires (CABA) experienced a substantial slowdown in April, dropping to 2.3%, marking a decrease of 0.9 percentage points (pp) compared to the previous month. This resulted in an annual variation of 52.4% and an accumulated rate of 11.1%. The significant deceleration follows a 3.2% inflation rate in March, following the removal of currency restrictions and the implementation of a floating exchange rate band between $1,000 and $1,400.
Government Intervention and Price Controls
In response to the rising prices, the government held meetings with supermarkets and mass consumption companies to prevent price increases post-cepo. Now, the government aims to set a cap on wage negotiations, known as paritarias.
Key Sectoral Inflation Rates
Among the sectors, personal care, social protection, and other products saw the highest variation at 3.7%, along with clothing and footwear, despite Minister of Economy Luis Caputo’s assurance that prices “would go down.”
- Beverages and Tobacco: Experienced a monthly variation of 3.4%
- Transportation: Varied by 2.6%
- Restaurants and Hotels: Varied by 2.6%
- Housing, Water, Electricity, Gas, and Other Fuels: Varied by 2.4%
- Health: Varied by 2.4%
April Inflation Drivers
The April inflation rate in CABA was primarily driven by increases in housing, water, electricity, gas, and other fuels. This development offers hope to the government ahead of the Consumer Price Index (CPI) release by the National Institute of Statistics and Censos on Wednesday, following March’s significant jump.
Key Questions and Answers
- What is the current inflation rate in Buenos Aires? The inflation rate in Buenos Aires slowed down significantly to 2.3% in April.
- How does this compare to the previous month? This represents a decrease of 0.9 pp compared to March’s 3.2%.
- What are the key sectors driving inflation? Personal care, social protection, and other products, along with clothing and footwear, experienced the highest variations.
- What measures has the government taken to control inflation? The government held meetings with supermarkets and mass consumption companies to prevent price increases post-cepo, now aiming to set a cap on wage negotiations.
- What factors contributed to the April inflation rate? The primary drivers were increases in housing, water, electricity, gas, and other fuels.
