Fynsa
There was not much divergence this time around. No shocks of any odd magnitude or impacts from the recent uncertainty over tariffs were expected. Thus, March's monthly change of 0.5%, in line with our and the market's expectations, represented something we have not seen for some time: normality. The year-on-year change came in at 4.9%, up from 4.7% in February, probably the last increase we will see in this cycle.
Although the increase was within estimates, it was noteworthy that the main impact was not Education, as usual, but Food, due to significant increases in vegetables and meats. On the downside, the most important decrease was recorded in the Transportation division, thanks to declines in some seasonal services and, as expected, in gasoline.
Although the aggregate indicator showed "normality", the market was more concerned about the underlying indicators, especially because of the risks regarding cost increases and the possibility of these being passed on to final prices. Thus, the non-volatile indicator showed an increase of 0.4% with respect to February, although it cut its variation with respect to the same month of the previous year from 3.9% to 3.7%. Although non-volatile services increased 0.7% on a monthly basis (driven by education), they went from 4.5% to 4.2% with respect to the previous year. Goods, on the other hand, experienced a null variation, going from 3.0% to 2.9% year-on-year. Therefore, it does not appear that the risks are being executed yet, or at least that is what the data of the current basket are showing (at least under our analysis). The diffusion index, meanwhile, came in at 58%, which although it was above what was recorded in 2024 (51%), was in line with the historical average.
For April, a month that usually "drags" some indexations from March, we initially project a variation of 0.3% m/m, which could suffer modifications mainly on the fuel side. The division with the highest upward impact on the index would be Food, especially due to increases in dairy products and oils. Next, Health, due to quarterly readjustments in several of its services. On the downward side, Transportation would once again stand out due to decreases in fuels and air transportation.
According to our scenario, from now on we would only see reductions in the y/y variation, currently at 4.9%. With the projected 0.3% m/m, inflation would drop to 4.6% YoY. Despite being mostly in line with the market during 2025, the divergence towards 2026 is remarkable, especially if we assume that term as "long term". Regardless of whether it comes true or not, this has happened before and has always ended up correcting. In fact, this is indeed what has been happening. Thus, we maintain our year-end estimate at 4.0%, with a convergence to 3% that would occur during 1Q26.
