After correcting the December inflation figure, former minister Domingo Cavallo now predicts it The price index will reach single digits in April, when it will be 8%.
From his website, the father of Convertibility had anticipated days ago that the inflation of the last month of 2023 would be “about 25%.” Finally, the INDEC scored 25.5% for December.
“Much of the increase in the inflation rate in December is linked not so much to the direct effect of the devaluation on the prices of goods which were aligned with the official exchange rate, but to the signal that the exchange rate adjustment sent to all suppliers of goods and services who had been repressed by price controls and had decided to escape those controls“he said in an article published online.
Under the title “The government will be able to launch a stability plan when it has managed to eliminate all traces of stock market securities”, Cavallo illustrated his projections on index prices in the coming months.
For January, the economist scored a record 26%just above the consensus of the Market Expectations Survey (REM) published monthly by the Central Bank and forecast at 25% for this month.
Cavallo’s projections They place the February index at 21% and the March index at 19%. And he anticipates it April the rate will drop sharply and It will be 8%. If these predictions come true, it will be the first single-digit record since October last year, when it reached 8.3%.
Cavallo predicts that inflation will also be at 8% in May and June, yield to 7% by July and stay in that monthly log throughout the second semester.
At the same time, Cavallo expects a smaller rise in the exchange rate than the market expects. For April, the former minister sees the official exchange rate at $1,028, while the REM, which sees inflation in single digits for June, estimates it at $1,028. $1,100.
“Until the conditions for starting the stabilization plan are met, It is very important that the real exchange rate is stabilized at a level compatible with foreign trade without quantitative restrictions.without traces of anti-export bias and with a level of external reserves sufficient to support the Central Bank’s monetary liabilities,” Cavallo noted in his blog.
Source: Clarin
