Argentina’s productive structure has, on the one hand, a high share of raw materials in its export basket, and, on the other, it exhibits a strong dependence on imports of capital goods and inputs. This explains the weight of the external sector in domestic inflationary dynamics. Although exchange rate fluctuations are of the first order to understand this process, autonomous movements in international prices cannot be ignored either, especially after the COVID-19 pandemic and the war between Russia and Ukraine have revived the inflationary phenomenon at the global level, precisely in a context where inter-industrial relations between countries influence international trade.
To account for these factors, in this technical note we present an analysis of the long-term determinants of inflation in Argentina for the period 2004-20224, incorporating the Agricultural Commodity Price Index (IPMPA) published by the BCRA, and a new External Price Index (IPE), which allows capturing the dynamics of producer prices in the main countries that supply inputs and capital goods used in the economy. local production.
