Inflation was 0.22% m/m in February, down from a temporary spike of 0.47% in January and better than last February's 0.4%. This slowdown helped ease annual inflation from 3% to 2.8%.
Core inflation in February was 0.23% m/m, compared to 0.45% in January and 0.37% in February 2023.
What’s Wrong With This Data?
- For more than six months in 2024, from May through October, the average monthly inflation rate was just 0.14%, while core inflation remained at a relatively stable 0.21%. However, this disinflationary trend has not proven sustainable. Since October 2024, monthly averages have risen to 0.33% for CPI and 0.29% for core inflation.
- The three-month average CPI inflation is an alarming 0.35%, while core inflation is 0.29%. Over the past six months, these figures are 0.3% and 0.29%, respectively.
- Excluding volatile components, inflation remains within the 0.28% — 0.3% range, which is almost twice the acceptable rate. A one-time stabilization in February does not indicate a lasting trend.
- In January, the main inflationary driver was the transport sector (goods + services), contributing 0.186 percentage points to monthly inflation. In February, however, this sector saw a deflation of 0.059 p.p. Removing this highly volatile category, inflation still settles around 0.28% – 0.29% m/m.
- The impact of Trump's tariffs will not be fully felt until mid-to-late 2025, as contracting, logistics, and cost distribution take time. However, a limited primary effect may appear in April – May, with the first inflation report reflecting this impact expected no earlier than May.
The Silver Lining
One positive aspect is the rental and leasing market, where price growth slowed to 0.28% in February. The three-month average is 0.31%, compared to 0.27% during 2017 – 2019, and significantly lower than 0.48% a year ago.
However, given current trends, inflation is likely to stabilize above 3% year-over-year, with a risk of drifting into the 3.3% – 3.6% range.
Conclusion
It is too early to determine the macroeconomic damage caused by trade wars, as foreign trade parameters have yet to stabilize. A meaningful assessment will only be possible by summer, once the new trade structure and proportions become clear.
For now, February's slowdown does not signal a sustained trend — only a temporary pause. Structural shifts and rising inflation expectations remain ahead.