Inflation Expectations Rise, Approaching 36% for the Next 12 Months

Before the release of the official price index for July by INDEC, scheduled for August 13, consumer perception has worsened again. According to the latest survey by the Torcuato Di Tella University (UTDT), inflation projections for one year have risen to 35.8%, marking an increase of 3.7 percentage points from the 32.1% recorded in June.

On the other hand, the median of the survey remained fixed at 30%, indicating that the price increase estimate did not vary for the representative profile of respondents, even though reports projecting higher figures increased.

The survey, conducted between July 2 and 16 on a national sample of 1,000 people, also indicated that for the next 30 days, respondents expect an average inflation of 3.55%, slightly above the 3.50% recorded in June. The median returned to 3%.

Sebastián Auguste, part of the team that conducted the survey at UTDT, stated that "expectations show increases in the three regions surveyed, although with different magnitudes."

In CABA, the expected average annual inflation rose from 29.8% in June to 38.8% in July. In GBA, it increased from 37.1% to 43.2%, while in the Interior it rose from 30.5% to 32.3%.

Compared to the previous month, the largest increase occurred in the City of Buenos Aires, where expectations rose by nine percentage points.

Auguste indicated that "by income, approximated by educational level, inflation expectations showed different behaviors between both segments."

In this context, in higher-income households, the average rose from 30.8% in June to 36.6% in July, while for lower-income households it decreased from 35.3% to 33.7%.

As a result, the gap between both groups narrowed from 4.5 to 2.9 percentage points.

From UTDT, it was clarified that both the mean and the median provide complementary overall views when analyzing projections. The average value reacts more quickly to shifts in the responses of the consulted individuals, while the median shows greater resistance to change and only experiences variations when the modification of forecasts consolidates on a large scale.

Auguste noted that "the one-year expectation rose while the next month's remained practically constant, suggesting that the perception of increase is based on doubts regarding the medium term."

According to the Market Expectations Survey (REM) from the Central Bank, the annual inflation would be around 30%. In the month-to-month analysis, the consulted specialists foresee a 2% increase in prices during July and estimate that variations will remain in a range between 1.7% and 1.8% monthly until the end of the year.

It is worth noting that the Consumer Price Index (CPI) for June marked 1.9%, closing the first six months of the year with a cumulative increase of 16.8% and a year-on-year advance of 33.5%. Among key items, Food and non-alcoholic beverages recorded a rise of 1.3%, while Clothing and footwear represented the smallest adjustment, with a slight increase of 0.4%, accumulating a year-on-year variation of 11.9%.

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