Fynsa
Although recent Februarys have shown high inflation rates, expectations for the second month of 2026 were much more moderate. The market, between analysts and projections implied in assets, debated between 0.1% and 0.2% m/m, with us falling within the higher range. Given the above, the zero variation reported by the INE was considered a major surprise. So much so that the year-on-year variation went from 2.8% to 2.4%, which had not been seen since September 2019.
At least from our perspective, the surprise came from a significant decline in the Housing division, explained by a lower increase in rents (the product with the greatest weight in the basket) and a greater decline in electricity rates, added to seasonal components that did not behave as such (for example, accommodation), which was not offset by a higher-than-expected increase in Food.
In any case, it is important to note that it was the volatile component of the basket that accounted for almost all of the lower annual price variation. While in December 2025 it stood at 3.6% y/y, in February 2026 it only reached 0.8% y/y. Furthermore, within this basket, the energy component of the volatile items went from 6.4% y/y to -2.6% y/y in the same period. Meanwhile, the CPI excluding volatile items, or core CPI, rose 0.2% m/m, bringing the annual comparison to 3.3%. Breaking it down, the behavior remains very typical: services rose 0.3% m/m, while goods remained unchanged.
For its part, the diffusion index reached 52%, not very different from the results for 2025 and 2024, although well below the figures for previous years and the average for February (56%).
In any case, we feel that the market is not particularly concerned about these figures and is more focused on the impact that geopolitical conflicts will have on local prices, particularly the short-term impact of rising oil prices and the depreciation of the peso. In this regard, and assuming that we only know what we know (and that predicting what will happen in the coming weeks is a particularly complex exercise), we believe that the combined effect of both variables would have a cumulative effect during March and April of 0.2 pp-0.3 pp. Thus, our projections for those months are 0.5% m/m and 0.4% m/m.
Given the context, this downward surprise provides room for us to see greater monthly variations without affecting medium- and long-term expectations. Although we understand the myriad of possible scenarios between now and a month from now, we have only made a slight adjustment to our 2026 inflation scenario, to 2.7%.
