Surging food costs are pushing inflation into the clouds, with market experts and analysts now forecasting that price hikes will total 126.4 percent this calendar year.
The projection, delivered on the eve of the release of the INDEC national statistics bureau’s official inflation data for April, is a significant jump of more than 16 points on the previous month.
It also comes just days after a World Bank report said that Argentina is suffering from the second-highest global food price surge, trailing only Lebanon.
Increases in food prices, which were projected to have risen 9.5 percent last month, would total 197 percent over the next 12 months if they continue at the same rate, a report from the University of Buenos Aires’ Centre for Argentine Recovery Studies said this week.
The latest market expectations survey from the Central Bank shows that experts now forecast a monthly inflation floor of seven percent in the lead-up to October’s general elections. By next April, the annual inflation rate could reach 146.7 percent, the report warned, implying a 33.4 percent growth from previous forecasts.
The World Bank report placed Argentina, at 107 percent, in second place among the nations that suffered the highest food inflation rate, behind Lebanon (352 percent) and ahead of Zimbabwe (102 percent).
The damning data piles further pressure on Economy Minister Sergio Massa, who has promised to contain prices through trade agreements and a sweeping price-control scheme.
Inflationary weight on food
In Argentina, food inflation disproportionately affects those who have less, as can be seen in the 120.1 percent yearly increase from INDEC’s basic food basket, an economic marker based on the extreme poverty line, and the 113.2 percent increase for the total basic basket, a marker based on the poverty line.
“This problem afflicts, above all, low-income households who do not have the means to protect themselves from price increases, since they allocate most of their income to subsistence,” the UBA-Centro RA report observed.
Many crucial products from the basic food basket, such as sugar, cooking oils, eggs, beer and wine experienced high annual inflationary increases, it added.
Oranges, sweet potatoes, and lettuce experienced among the highest annual price jumps.
Inflation in Buenos Aires
At the municipal level, Buenos Aires is following the national trends. The City recorded an overall 7.8 percent Consumer Price Index jump for April, raising the first quarter inflation figure to 31.2 percent.
With a 10.4 percent increase in the month of April, food and non-alcoholic beverages was also the sector with the highest price variations for the city, according to a report released by the City Economy Ministry on Monday.
Following closely behind, the clothing sector increased by 9.4 percent last month and transportation costs have jumped 8.1 percent.
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In comparison to April 2022, restaurants and hotels experienced the greatest increase in inflation, 130.9 percent, followed by food and non-alcoholic beverages, 119.5 percent.
– TIMES with agencies