July inflation would have closed at around 2%, according to analysts

Argentina's inflation rate for July is projected to hover around 2%, according to private sector analysts, with estimates ranging between 1.9% and 2.1%. This would mark a slight increase compared to June’s figure of 1.9%, which was the lowest since August of last year. The anticipated rise is attributed primarily to seasonal factors associated with winter vacations and the depreciation of the exchange rate, which has influenced food prices. If these projections hold true, official data from Argentina’s National Institute of Statistics and Census (Indec) will be released on Thursday, the process of disinflation that had been ongoing over the past three months could face a temporary interruption. However, most economists believe this upward trend is likely to be short-lived, with monthly figures remaining below 2% for the remainder of the year. The estimated inflation rate for July aligns with previous assessments made by several economic consulting firms. María Castiglioni, director of CyT Asesores Económicos, noted that her firm’s survey of retail prices in Greater Buenos Aires showed a monthly increase of 1.9%, matching June’s reading and representing the lowest since August of last year. She explained that the annual variation in the national consumer price index (IPC) reported by Indec would remain at 33.5%, the same level as in June. According to Castiglioni, core inflation and seasonal components showed greater activity in July compared to June, while regulated prices moderated. She pointed out that typical seasonal effects during July, such as increased tourism-related spending linked to winter holidays and the FIFA World Cup, particularly impacted air travel costs. These factors contributed to the behavior of the seasonal component. Food and beverage prices, one of the most significant categories in the consumption basket, rose by 1.6% in July, slightly below the overall average and lower than the previous month’s rate. Castiglioni highlighted that the decrease in fruit prices helped achieve this result. Other categories saw changes of approximately 1.4%, maintaining a pattern similar to June. An exception was clothing, which experienced a decline due to the start of winter sales. EcoGo, another consulting firm, estimated that the general inflation rate for July would be around 2.1% per month. Their analysis indicated that after the first four weeks of the month, stability in highly volatile seasonal categories combined with reduced clothing prices due to winter sales allowed the overall index to close 0.1 percentage points below the previous week’s record. For food specifically, EcoGo noted that prices for household-consumed products rose by 0.5% during the fourth week of July. Including the variation in food consumed outside the home (0.6%), the inflation rate for the food category would be 1.8%. Mateo Borenstein, an economist from Empiria, estimated an inflation rate of 1.9% for July, within a range of 1.8% to 2%. He suggested that although the trajectory might not be linear, the ceiling for future rates could be 2%. Looking ahead to the end of the year, he predicted that monthly variations could approach closer to 1% rather than 2%, potentially leading to an annual inflation rate lower than that of 2025. Elisabet Bacigalupo, a senior macroeconomist at Abeceb, also projected an inflation rate of 1.9% for July. She acknowledged that the rate could be slightly higher, perhaps reaching 2%, if the seasonal impact of winter holidays exceeds expectations. Nevertheless, she emphasized that July would be very similar to June, marking a pause in the disinflation process rather than a change in trend. Julian Neufeld, an economist from the Foundation for Liberty and Progress, stated that his preliminary estimate based on data up to the fourth week of July showed an inflation rate of 2.1%. He identified two main reasons for the temporary rebound in July: the seasonal increase in demand for goods related to winter holidays, especially affecting recreation and culture, and a greater influence of non-alcoholic beverages and food driven by a 6% depreciation in the wholesale exchange rate since May. Looking forward to the second half of the year, Neufeld believed that prices would resume their disinflation path, settling below a 2% monthly variation. Damián Quirós, CEO and founder of Q, a new channel under Editorial Perfil, estimated that the inflation rate for July would fall between 2% and 2.3%, possibly closing near 2.1%. He explained that July typically exhibits unique characteristics due to winter vacations, which boost activities related to tourism, accommodation, and recreation. Additionally, lower production of fruits and vegetables could pressure basic food basket prices. Quirós stressed that the potential increase should not be interpreted as a shift in trend, suggesting that the process might resume its downward trajectory in August and September. Federico Glustein, an economist and consultant, aligned with this perspective, placing the inflation rate for July between 2.1% and 2.2%. He anticipated a smaller increase in food prices, between 1.4% and 1.5%, although services continued to exert pressure on the overall index. Glustein noted that increases in electricity, gas, transportation, education, and health maintain a dynamic that could exceed the general inflation rate. He also mentioned that initial August data show more moderate food price movements. Anticipating August, September, and October could see readings below 2%, he expressed concern about November and December, noting that these months are traditionally challenging due to holiday-related spending. The behavior of the official dollar could add further pressure. Glustein observed that the market projects a value close to $1,650 by the end of the year, warning that the so-called pass-through effect could generate some impact on prices toward the end of 2026. Meanwhile, small and medium-sized enterprises (PyMEs) continue to struggle with financing difficulties amid the normalization process. Leonardo Alberto, an economics graduate and accountant, noted challenges among his clients in accessing working capital at reasonable interest rates. Diego Achilli, a PyME industrialist from Tres de Febrero, highlighted the increasing costs of fixed expenses, particularly in services, which have risen significantly beyond expectations. He detailed that industries faced energy price hikes of 25% to 30% during the analyzed period, posing particular challenges for businesses reliant heavily on electricity. These rising service and fixed costs complicate both business operations and household budgets, presenting ongoing economic challenges.