Saturday, November 26

Inflation shoots up to 7.4% in February, its highest rate in 33 years

The Consumer Price Index (CPI) rose 0.6% in February compared to the previous month and suddenly raised its year-on-year rate by more than one point, to 7.4%, its highest rate in 33 years, specifically since July 1989.

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With the February data, the interannual CPI chains its fourteenth consecutive positive rate, according to the advanced data published this Monday by the National Institute of Statistics (INE).

According to Statistics, the increase in the interannual CPI for February to 7.4% is due to “generalized” rises in most of its components, among which those of food and non-alcoholic beverages and fuels stand out, as well as the behavior of electricity prices, which fell less in February than they did in the same month of 2021.

The INE incorporates in the CPI data preview an estimate of underlying inflation (without unprocessed food or energy products), which increased six tenths in February, to 3%, which is more than four points below the general CPI rate.

The conflict in Ukraine has been decisive in boosting prices that economic institutions expected would begin to fall with the start of spring. “In principle, that deceleration that we expected from the spring would no longer occur,” summarized Raymond Torres, director of Coyuntura de Funcas, who believes that “even in very conservative hypotheses”, and depending on the magnitude of the conflict and its extension In time, the CPI may go this 2022 to an annual average of 5.6%, one point above the 4.6% that they forecast until now.

Funcas even estimated that “in the event of an increased risk in which the currently observed prices are perpetuated, the CPI would increase to 6.5%, almost two points more than in the pre-conflict forecast.”

Monthly advance of 0.6%

In monthly rate, the CPI registered an increase of 0.6% in February compared to January, in contrast to the decrease of 0.4% experienced the previous month.

In the second month of 2022, the Harmonized Consumer Price Index (IPCA) placed its interannual rate at 7.5%, more than one point above that of January.

For its part, the advance indicator of the IPCA advanced by 0.7% in monthly rate. The INE will publish the final CPI data for February in mid-January.