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Scotiabank Expects Benign CPI Inflation In June

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  • Following the disappointing May IMACEC activity data earlier this week, Scotiabank expects June CPI to fall 0.1% m/m on Monday, in line with market expectations reflected in forwards, the BCCh traders survey and in the base scenario of the June IPoM. This would take the annual rate of inflation to 3.7% y/y.
  • Likewise, they project that the CPI ex-volatiles measure would increase 0.1% m/m, keeping the annual rate at 3.5% y/y, mainly due to a 0.2% m/m rise in the services component, offsetting a 0.1% m/m fall in goods prices. Scotiabank also projects a 0.5% m/m fall in volatile items, mainly due to a decline in gasoline and some foods.
  • Scotiabank expects partial reversals of pre-CyberDay price increases in June, observed mainly in clothing and footwear but also in electronic items. With this, they note that the inflationary diffusion for June would be the lowest so far this year. On activity, meanwhile, the zero-dynamism observed recently makes it difficult to achieve 2024 growth above the central bank and government’s 2.7% estimate, in their view, especially if there is no recovery in investment.
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  • Following the disappointing May IMACEC activity data earlier this week, Scotiabank expects June CPI to fall 0.1% m/m on Monday, in line with market expectations reflected in forwards, the BCCh traders survey and in the base scenario of the June IPoM. This would take the annual rate of inflation to 3.7% y/y.
  • Likewise, they project that the CPI ex-volatiles measure would increase 0.1% m/m, keeping the annual rate at 3.5% y/y, mainly due to a 0.2% m/m rise in the services component, offsetting a 0.1% m/m fall in goods prices. Scotiabank also projects a 0.5% m/m fall in volatile items, mainly due to a decline in gasoline and some foods.
  • Scotiabank expects partial reversals of pre-CyberDay price increases in June, observed mainly in clothing and footwear but also in electronic items. With this, they note that the inflationary diffusion for June would be the lowest so far this year. On activity, meanwhile, the zero-dynamism observed recently makes it difficult to achieve 2024 growth above the central bank and government’s 2.7% estimate, in their view, especially if there is no recovery in investment.