The National Institute of Statistics and Census (INDEC) reported on Wednesday that January inflation stood at 20.6%a fact that in the Government they celebrate because they keep which brand a slowdown five percentage points compared to December e a figure lower than that estimated by private consultancy firms.
After knowing the index for the first month of the year – the first complete series under the direction of Javier Milei – the Ministry of Economy claimed that 20.6% “confirms the deceleration path in the observed nominality from mid-December” and they pointed out that this happens “at a speed higher than that expected by the market”.
In this regard, please note that the median of the estimates of Market Expectations Survey (REM) carried out by the Central Bank Last month it was at 21.9%.
REM is the systematic monitoring of principals short and medium term macroeconomic forecasts of different working groups. For January, the BCRA reported, forecasts from 37 participants were taken into account, including 24 local and international consultancy firms and research centers and 13 Argentine financial entities.
Meanwhile, the January inflation number indicates the portfolio he manages Luis Caputo“he still implied a high statistical carryover from Decembercoming from protrusion inherited monetary policy and relative price honesty in the first week of the current administration.”
Luis Caputo and the effect of the December devaluation
In this sense, Caputo’s portfolio specifies that “the transfer to devaluation prices since December it was much less “to the jump in the exchange rate in August last year.”
“While at the time the improvement in the real exchange rate took place in less than two months, between December and January inflation was 51%, compared to a nominal increase in the reference exchange rate of 129%,” they said.
They argue that this situation occurred despite the fact that “as of December they left honestly other prices that had been heavily delayedsuch as fuels or mass consumer products subject to controlled pricing regimes.”
The Economy insisted on the program carried out by Javier Milei’s government “aims to support and deepen this disinflation scenario”.
“The combination of fiscal, monetary and currency anchors and the normalization of foreign trade guarantee a tdecreasing inflationary trajectory“, they promised.
Finally, they stated that “macroeconomic stabilization, based on financial equilibrium and the honesty of relative prices, is a necessary condition for the Argentine economy to enter into an virtuous path of growth in real wages and the creation of quality employment”.
Source: Clarin
