Something has happened here since the elections, with prices in general and especially with food and drinks.
Have prices fallen? Has inflation increased again?
For now, this process is causing a stir among government strategists. An ironed exchange rate that is lower today in real terms than it was at the time of the elections.
And consumption that remains cold, No improvements compared to the rest of the year.
Inflation: Why prices are overheating
Inflation dynamics are overheated. There is little doubt about that. This was determined by INDEC last month and showed a consumer price index of 2.3% for October; This was confirmed by the consulting firms that monitor prices week by week and expect 2.5% for November; and it is now also determined by the retail chains, which received lists with increases compared to previous months.
The latest report from consulting firm EconViews concluded: In the last six weeks, there have been five weeks in which prices rose by at least 1% weekly.
Also at Analytica, the consulting firm run by economist Ricardo Delgado They measured 1% in the first week of this month.
Marina Dal Poggetto’s Eco Go estimated November food and beverage increase at 3.2%. And a similar level for this December.
Meat and groceries play the main role in the increases
Meat prices have been the main increase in the last 60 to 70 days. And the momentum is not slowing down.
A kilo of half beef, which was worth $8,000 at the end of November, It is already available in butcher shops for $9,000. An increase of 12%; nothing less.
“Both meat and fruit influenced the momentum, particularly in the first two weeks of the month. with corrections of 5.8% and 18.7% respectively,” summarized the latest Eco Go report.
From October to early December, the increase in meat wholesale was 30%, says Andrés Costamagna, director of Rural a iProfessional.
“Beef led the price increase (+65% y/y), well above the rest of the nominal value,” highlighted a GMA report. Inflation was around 31 percent last year.
However, it’s not the only price that moves when it comes to food and drinks.
To retail chains – large and small – New offers come with price increases of over 3%.
These increases include staples – flour, pasta, oils, milk – and other secondary necessities such as cookies and dairy desserts.
When it comes to drinks, it depends more on the settings. This includes soft drinks and also beer, between 5 and 15% each, although sales in this sector have fallen.
The “balance sheet” factor puts supermarkets and companies on alert
The director of a food factory – one of the executives – admitted that some large companies had decided to improve their marketing margins before the end of the year.
“It was a very cautious year for all packaged foods. “It was decided to rebuild margins for the products most affected by the crisis.”explained the food director iProfessional.
This decision was about a crucial issue: increasing the value of meat.
This is a variable that is often mentioned in the industry, but behind closed doors. Never in public. And he points to the fact that the price of meat is usually a reference price for the rest: when the value of the farm changes, this movement triggers a reflection in the food industry.
“It works as before with the ‘blue’ dollar. This price does not determine the final price of a product, but The truth is that as the gap has widened, inflation has also overheated. “A similar effect occurs with meat, at least for the food industry.”admits the manager of another factory.
And one more thing: companies observe the increase in electricity and gas prices month after month. And in terms of logistics, could they respond to rising fuel prices other than by adjusting their price lists?
When will inflation fall with a flat dollar?
These moves do not represent a change in expectations. Neither private consulting firms nor companies report a process that would explain a worsening of the expected scenario for 2026.
However, and this should not draw attention, the inflation process in Argentina is difficult to break.
What was said above: Neither the fact that the dollar was subdued nor lower consumption led to a weakening of the momentum. Monthly inflation has increased since May; instead of sinking.
Here is a wake-up call for the government. What impact would a rise in the dollar, no matter how moderate, have? Can consumption improve if inflation continues to account for much of Argentina’s income?
Dal Poggetto is conclusive: “The inflation process will ease from February and March when the seasonal price increase cycle ends,” says.
“From then on, the CPI should fall below 2% monthly,” closes.
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