The National Institute of Statistics and Census (INDEC) released the variation in the cost of living last August, while the controversy over how to deal with the soaring prices deepens. The variation for the month was driven by the 3.1% increase in medical care and health spending, due to the adjustments authorized for prepaid medicine companies, within their jurisdiction and to a lesser extent, 1% in clothing and household equipment. On the contrary, the price stability in entertainment and slight increases of 0.1% in transportation and communications, 0.2% in education, and 0.5% in housing and basic household services contributed to the slowdown.
Food rose by 0.8% and other goods and services by 0.7%. According to official information, between January and July, the price increase was 6.7%, while for private companies it was over 15 percent. The various economic consulting firms say that inflation in 2010 had a range of between 20 and 25 percent. The underestimation of inflation in 2010 will also impact the budget estimates for 2011, an election year for which the Government is talking about a single-digit price increase.
Higher increases in the wholesale channel
The official measurement showed that in the production and concentrated markets channel the “General Level” of the IPIM rose 0.9%, with 2.1% in “Primary Products” and 0.6% in “Manufactured Products and Electric Energy”.Agricultural products rose 1.1%, as a result of increases of 4.5% in agricultural products and a 0.1% decrease in livestock products. Among manufactured products and electric energy, INDEC highlights the increases in refined petroleum products (1.8%), leather, leather goods and footwear (1.3%), and chemical substances and products (0.9%). While there were declines in metal products except machinery and equipment (0.5%) and in furniture and other industrial products (0.1%).In this way, in the first eight months, it accumulated an increase of 10.3% and 15.1% since August 2009.
Observations by Ecolatina
The CPI of the consulting firm founded by former minister Roberto Lavagna based the increase of 1.8% in August and that accumulates an increase of 17.7% so far this year and 24.4% in the past twelve months, on the increases that occurred in “medical care and health expenses due to the increase in prepaid medicine fees; food and beverages, due to increases in vegetables, meats and baked goods; equipment and maintenance of the home and housing and basic services.”
The study clarifies that “unlike what was observed in the first months of the year, the increase in the CPI no longer responds exclusively to food but is increasingly generalized to the majority of the items: today almost half of the goods and services that make up the index grow by more than 20 percent.”But that’s not all, Ecolatina warns, as we are facing a clear process of accelerating price increases, given that “just ten months ago only 7.2% of the CPI was growing at more than 20% annually.”For its part, core inflation, which excludes regulated goods and services or those with a high seasonal component, shows a similar dynamic. Since its low in October 2009, this indicator rose 13.3% to 26.6%,” explains the consultancy.
