As Martín Guzmán works on a plan of steps to contain prices and rebuild revenuethe main challenge of the Minister of Economy in the coming weeks is avoid the rotation of inflation expectations. It comes amid talks with the Monetary Fund to restructure the agreement approved in March, which could include a revision of inflation projections.

The minister expressed that concern at the last meeting he held with the Argentine Industrial Union (UIA) and CGT more than a week ago, before learning of inflation of 6.7% in March, which reached its highest level in 20 years.. “We should avoid annual data for March, we should coordinate and speak between sectors to lower expectations”Guzmán warned, accompanied by his counterpart from Productive Development, Matías Kulfas, and from Labor, Claudio Moroni.

He did not explain how he would do it, but made sure the March data was a “ceiling”. and then the Consumer Price Index (CPI) will decline in April and May. The request pointed out that businessmen and unionists do not take the month of March as a point of reference. Otherwise, if they project the same inflation rate in 12 months, prices will no longer increase by 60%, as expected by consultants, but 117%. A figure which also caught the attention of Javier Milei.

But Inflation in March was higher than expected and warmed the spirit of the unions. In recent days, some unions have doubled the pressure to push for the reopening of joint ventures and achieve higher growth than they discussed last month. Workers’ representatives refused to negotiate medium-term agreements before an inflation projected to exceed 60% by 2022.

Guzmán’s message was accompanied by the launch of regulated price baskets and the expected call for equality. The government is looking for this year’s wage increases are about 50% on averagein various tranches and with terms of at least 6 months, something that began to challenge the demands of Truckers (a $ 20,000 bonus, equivalent to an 85% annual increase), banks (60%) and Commerce ( an amount increased to $ 18,000).

At UIA, they agree with the minister’s message. “The idea is that March inflation is a ceilingthen continued high but dropped a bit in April and May, June may have risen due to rates, but it dropped to 4 or 3%, “said a source from the manufacturing plant. But the industrialists did not shares CGT proposals agreed on parity for three months or advance revisions if inflation exceeds expectations. “Quarterly contracts don’t help”they hold.

Amid pushing to remove him from his post, Guzmán appeared on Tuesday with SME metallurgical entrepreneurs when he visited ADOX, a plant that makes medical supplies in Ituzaingó. There, he continued his concern about inflation by pointing out that rates would not increase as much as they should, he heeded the request to allow import permits and guarantee activity, and demanded “political support” for the program with the IMF.

The head of the Treasury will leave this Monday for a meeting of the Fund and the World Bank, in Washington, where he will seek to demonstrate the fulfillment of the objectives. Staff expect the program will need to be recalibrated, especially the dollars and rates. Without the available exchange rate anchor and the same margin to freeze rates, controlling inflation becomes difficult. Technicians also point out the same: they believe that “high levels of indexation in past inflation” contribute to inflationary inertia.