The CPI result reported today by the INE far exceeds market expectations and ranks as the highest since October 2019.
The news was commented on by Economy Minister Lucas Palacios on Twitter. “The greater availability for domestic consumption and the opening of the economy activated the demand for goods and services, in a context of global supply restrictions, pushing prices upwards during July, with a monthly increase in the CPI of 0.8%, above expectations,” he said.
In fact, the secretary of state said, “the pace of economic recovery has an important, though not unique, cyclical spending component (also targeting investment).” In part, he added, “this is explained by the greater liquidity of families through state transfers (IFE and bonds) and withdrawals from social security funds.”
Palacios commented that the progressive decrease in contagions that we have observed in the last two months, “has allowed greater mobility and economic openness since June, activating various economic sectors that had remained further behind due to confinement.”
“The price increase is recorded in almost all the components of the basic basket, although they are concentrated in transport and food. This ratifies a pressure on the demand side, in the face of a supply still lagging and activating strongly,” he said.
