Luis Caputo’s lethal combo seems to have an effect, since prices began to moderate the increases. So, the chainsaw and blender they managed to make the fiscal adjustment forceful enough to close the first quarter of the year with primary fiscal and financial surplus. Added to this was the exchange rate anchor (crawling peg at 2% monthly) –that, although some analysts maintain that an exchange rate delay is being generated, it is still in force-, and finally, the strong recession, which sharply cooled the economy.
But the doubt that resonates in the market is whether this disinflation process will be maintained in the coming months. For the Consultant 1816For example, there are two key risks: the future exchange rate unification and the eventual recovery of consumptionphenomena that could hinder (or at least postpone) disinflation.
If we focus on the official dollar, It is worth mentioning that a few days ago the vice president of Central Bank (BCRA), Vladimir Werningmade a presentation in Washington of the Caputo-Milei plan called “Argentina stabilization program: progress and perspectives,” in which he noted that Sectoral real exchange rates reveal high business margins (and dispersed in dollars)having a more relevant role than wages in determining the price level.
About, city reports they warn that a crawling peg acceleration, Without a doubt, it would go against disinflation, and in its presentation for global investors, the Central Bank gave the signal that look for a way out above the labyrinth of the nominal race “devaluation – inflation – exchange rate delay – devaluation”.
But, beyond the process of crawling pegthe eventual lifting the stocks would put collection in check. According to a report by Romano Group, revenues fell 4.5% in real terms in the quarter. VAT in the quarter barely rose 0.5% in real terms, while Profits, as a result of its reforms in the electoral race, fell 37.1%. Despite the general decline, what sustained tax revenues was taxes linked to foreign tradewhether export duties (rose 71.9%), import duties (rose 9.4%) and PAIS tax, which jumped 305%according to the Ministry of Economy itself.
“The economic plan is a dependent stock. It is Martín Guzmán with puts (exchange insurance) and a wig”defined this week the director of Eco Go, Marina Dal Poggeto, to the current Minister of Economy.
Inflation: what was the anchor to begin to lower it
The Economist Claudio Capralulodirector of the consulting firm Analyticsin a conversation with this medium, agreed with the diagnosis. “There are two prices that have been the anchor of inflation in recent months: dollar and salaries“.
Regarding the last point, he considered that perhaps it will be easier to handle under the administration of Javier Milei. “Regarding salaries, Recession and decline in jobs tend to be factors that limit their recovery.. In turn, the Government is directly seeking coordinate joint ventures so that they close according to the goal they set,” he said.
In fact, this week from Eco Goin the presentation of the purchasing power estimate, indicated that Family income fell 16.2% year-on-year in the first quarter of the year and reached the lowest level in more than a decade.
“The most complex front is the dollar, the exchange rate delay and the difficulty that the Government finds in obtaining external financing generate objections regarding how sustainable is this semi-fixed exchange rate“, hill.
Disinflation?: what trend has been seen in recent days
According to the consulting firm’s survey Econviewsthe price basket of perfumery and cleaning foods showed a drop of 0.4% in GBA supermarkets for the fourth week of April. It is the second consecutive week of deflation for this type of consumer product measurements.
“The Government is playing to show a strong disinflation of the economy. Thus, it went from freely deregulating markets to starting conversations with economic sectors and unions, while at the same time rolling back increases previously deregulated by DNU,” they indicated from Eco Go.
According to the price disclosure of this consultancy for In the third week of April, the weekly variation in food was 1.4% and the general projection for April is at the level of 9.1%.. “If the drop in prepaid payments in the month of April is attributed, the RPM is 7.3%,” they explained.
