Bs.as Consumer Price Index Minus 0,8 % For August

[Rich One]

The lowest CPI since 2002....! during the crisis... However the accumulated year to year is perhaps close to 40 %...!
Is the government objective of 12 % CPI for 2017 realistic..?

 

[Somewhereinba]

I just can't see it happening - it is part of the culture.. Every year people re-sign leases with 30-35% increases in rental YOY.. This is all the Argentines know - its a self fulfilling prophecy.

 

[Rich One]

For those who live out of a fixed income it means a 40 % cut in pay....

 

[RodalfoWalsh]

I just can't see it happening - it is part of the culture.. Every year people re-sign leases with 30-35% increases in rental YOY.. This is all the Argentines know - its a self fulfilling prophecy.

It's happening already. The 40% annual inflation has to do with the cut in subsidies and the 50% devaluation of the dollar. If Macri stays the course he'll get inflation down below 20 maybe even to 14. The trade off is growth, the debt is lying heavy on the exchange rate and is going to kill exports. Problem is that inflation was a campaign promise.

 

[Somewhereinba]

It's happening already. The 40% annual inflation has to do with the cut in subsidies and the 50% devaluation of the dollar. If Macri stays the course he'll get inflation down below 20 maybe even to 14. The trade off is growth, the debt is lying heavy on the exchange rate and is going to kill exports. Problem is that inflation was a campaign promise.

What makes you think Argentine producers will not raise their prices 30-40% again next year as they have done every year? People here have no issues paying over the top prices for shit quality and accept the constant price increases. Like I said - I think a big part of the whole thing is the peoples mentality which also plays a big part in economics.

 

[RodalfoWalsh]

What makes you think Argentine producers will not raise their prices 30-40% again next year as they have done every year? People here have no issues paying over the top prices for shit quality and accept the constant price increases. Like I said - I think a big part of the whole thing is the peoples mentality which also plays a big part in economics.

Because consumers won't continue to bear them. They're not now. You're right that there is a cultural aspect that drives inflation but there is also policy and prices can be constrained by the amount of money available which is what's happing now.

From BCRA's august report.

• Teniendo en cuenta toda esta información, en el transcurso de agosto el BCRA disminuyó la tasa de interés de la LEBAC de 35 días por un total de 2 p.p., llevándola a 28,25% al término del mes. Las tasas de interés de sus operaciones de pases pasivos y activos fueron reducidas en igual magnitud y a fines de agosto se ubicaron en 24%-33% y 25%-34%, para los segmentos de 1 día y 7 días, respectiva- mente. En la primera semana de septiembre el BCRA bajó 0,5 p.p. adicionales su tasa de interés de refe- rencia, dejándola en 27,75%; en igual medida redujo las tasas de las operaciones de pases. El BCRA seguirá manteniendo un claro sesgo antiinflacionario para asegurar que el proceso de desinflación conti- núe hacia su objetivo para este año de una inflación mensual de 1,5% o menor en el último trimestre. Asimismo, la autoridad monetaria conducirá sus decisiones acentuando el foco sobre las expectativas de mediano plazo, en especial las del año 2017, en vistas de los rezagos que presentan los mecanismos de transmisión de la política monetaria.