Inflation breached the 3% floor in August and was the lowest in twelve months

Food and non-alcoholic beverages was the one with the highest incidence. However, the 1.5% rise was well below the previous months. For example, it had been 3.4% in July.

Most of the foods surveyed showed a slowdown in prices. The fall of vegetables and the stability of meats stood out. Instead, milk, eggs, bread, coffee and sugar led the increases.


The Communication division (-0.6%) presented deflation in August, while Housing, water, electricity, gas and other fuels (1.1%) was the one that increased the least. In some regions, it even registered falls associated, fundamentally, with the reduction of the gas tariff due to the extension of the cold zone regime. Within the same category, expenses moved upwards, as a result of the increase in salaries of those in charge of buildings.

The drop in vegetables, tubers and legumes affected the seasonal category (0.6%), the one with the lowest increase in August. Regulated prices rose 1.1%. The increase in prepaid expenses was offset by the decrease in the gas rate. The Core IPC category showed an increase of 3.1% in the period.

Inflation in August was the lowest since the same month last year and consolidates the slowdown shown by the indicator since March last year, when it reached a peak of 4.8%. The year-on-year variation was also a few tenths less than that of July and moves the indicator a little further from the record of almost 54% reached during the last year of the Mauricio Macri government.

The Ministry of Economy underlined in a statement that August inflation continued the downward trend that has been registered since April and broke the 3% barrier of the previous month. 2.5% was recorded in August, being the lowest record since August 2020.

He also highlighted that the 1.1% rise in regulated prices in August was the lowest value in the last twelve months. The seasonal ones decelerated sharply to 0.6% monthly, against 4.9% in July.

Some items that recorded the greatest acceleration in their inflation rate were health (4.2% vs. 3.8% in July) due to a rise in prepaid, clothing (3.4% vs. 1.2% in July), recreation and culture (3.7% vs. 3.1% in July) and education (4.2% vs. 2.5% in July).

By regions, the one that registered the lowest inflation in August was whose, where even the 2% floor was pierced. The National CPI experienced an increase of 1.8% in these provinces. Then the Pampas region was located, which includes Santa Fe, with an inflationary evolution of 2.3%; and Northwest, with a rise of 2.4%. Greater Buenos Aires (2.6%), Northeast (2.7%) and Patagonia (3.4%) showed rates above the national one.

Consumption grows

The slowdown in inflation, together with the recomposition of income, has an impact on consumption, which has been showing slight but sustained growth in recent months. As reported yesterday by the Argentine Confederation of Medium Enterprises (Came), SME retail sales at constant prices grew 9.1% in August compared to the same month of 2020. In addition, 40.6% of the businesses surveyed declared to be better than in 2019, the year before the pandemic.

The entity pointed out that “the stability of the dollar, salary increases, lower inflation and the greater injection of money from the State to households had a positive impact on sales.”

On the other hand, they operated against “the restrictions of the banks in the financing with credit cards and the electoral uncertainty, which mainly affected the sale of durable goods.”

Compared to August 2020, the highest variation rates were in clothing, lingerie and accessories (38.5%), toy stores and bookstores (24.0%), and clothing and sports and recreation items (26.4%) . On the other hand, there were falls in food and beverages (-7.1%) and perfumery and cosmetics (-8.8%).

In the case of home appliances, electronic items, computers, cell phones and accessories, Came highlighted “the rejection of credit cards due to lack of funds, or late payments” due to the fact that “banks have been updating the limits well below inflation and cutting cards if payment is delayed ”.

Construction: expect more activity

55% of construction entrepreneurs considered that activity will increase in the September-November quarter, which means an improvement in expectations compared to the previous measurement and for the third consecutive time. This was indicated by a survey carried out by the Argentine Chamber of Construction (Camarco). “The evaluation of the measures taken has improved significantly compared to the previous wave,” said Camarco in a statement.

Net employment expectations rise

The net employment expectation for the fourth quarter of 2021 rose 7% in the year-on-year comparison and 3% compared to the previous quarter, due to the push from the intention of hiring entrepreneurs from the Cuyo and Northwest region. The “improvement in the health situation” also played a role. This was the result of the survey periodically carried out by the Manpowergroup consultancy.

The general director of the Manpowergroup consulting firm, Luis Guastini, pointed out that the work produced a “slight rebound in hiring intentions”, especially “driven by the expectations of the Cuyo, NOA and Pampas regions.”

In seven of the nine economic activities surveyed, employers expect to increase their payroll during the last quarter of 2021.

Compared to the same period surveyed the previous year, the hiring intentions are strengthened by eight, said the Manpowergroup executive.

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