Food surprise: inflation slowed in the first week of May, and consulting firms predict continued slowdown.
The Econviews survey yielded an unusual result: a 0% increase in food and beverage prices during the first seven days of May in Greater Buenos Aires . The consulting firm also highlighted a 1.4% drop in fruits and vegetables , along with a moderate 0.8% increase in dairy products . Overall, the report indicated that the cumulative rise in inflation over the last four weeks was 2.3% , a record low not seen since December.
Our price survey for a basket of food and beverages in Greater Buenos Aires showed a 0% change in the first half of May. Produce products changed by -1.4% on average, while dairy products increased by 0.8%.
In the last four weeks, it has accumulated a 2.3% increase. pic.twitter.com/jgwCqmBEYC
Other studies confirmed the trend. According to LCG , weekly food inflation was 0.3% , the lowest for a first week of a month since November. In recent weeks, its average monthly indicator has fallen below 2% , reaching 1.9% .
The consulting firm Eco Go , for its part, also measured a 0.3% increase in food consumed at home for the first week of May. With this result, it projected food inflation for the entire month to be around 2.6% , even including food consumed outside the home.
The slowdown in food price increases comes in the context of the government's new exchange rate scheme. The relative stability of the official dollar, the drop in fuel prices, and the containment of regulated prices largely explain this phenomenon. According to Equilibra , headline inflation for the first week was 0.9% , driven by occasional increases in some goods, but with minimal variation in regulated prices, which increased by just 0.8% , and a contained increase in food prices ( 0.3% ).
The consulting firm linked the price freeze to several recent measures: the 4% drop in gasoline prices , agreements on prepaid medical insurance, and the postponement of tariff adjustments. All of this, along with less pressure from seasonal products, would have contributed to moderating the price pass-through after the end of the restrictions.
After the 3.7% peak in March , both the government and consulting firms expect a slowdown in April , the official figures for which will be released this Wednesday. This Monday, the first official figure released was the Buenos Aires CPI, which showed a 2.3% increase in April and a cumulative increase of 11.1% for the first four months.
For Eco Go , headline inflation in May could again reach 2.3% monthly , although these are still preliminary estimates. According to its analysts, the combination of lower exchange rate pressure, falling international prices, and specific agreements in key sectors could sustain the deflationary process at least through this quarter.
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