The Argentine economy is experiencing a March of mixed signals. On the one hand, The cold numbers of the private consulting firms bring relief that the Government, curiously, prefers to take with a grain of salt.
The latest report from the Orlando J. Ferreres Center for Economic Studies, OJF, revealed that March inflation will be around 2.7% monthly, marking a strong deceleration. However, Minister Luis Caputo came out to lower expectations, admitting that the official data could show a rebound.
Ferreres’ numbers: towards consolidated single-digit inflation?
The survey by Orlando Ferreres & Asociados left a feeling of optimism in the market. According to the CPI-OJF, general inflation accumulated in the first quarter reached 8.2%, but the monthly data for March (2.7%) shows a downward curve compared to the previous months of the year.
The report highlights that, Although “Regulated” prices rose 4.3% due to tariff adjustments, the core measurement, which reflects the underlying trend of the economy, barely remained at 2.0%. For analysts, this would indicate that inflationary inertia is losing strength.
Caputo’s warning: “Inflation can go higher”
Contrary to Ferreres’ information, the head of the Treasury Palace, Luis Caputo, showed a much more cautious face during his speech at the Rosario Stock Exchange. In a speech where there was no shortage of outbursts and weighty political definitions, the head of the Treasury confessed that the course is not free of “shocks.”
“That’s why last month’s inflation was higher because of gasoline and education, it doesn’t matter. It’s not going to derail us from our path. We’re going to reach the goal,” said Caputo.recognizing that the impact of regulated prices could dirty the final Indec number and break the downward trend that the Government had been celebrating.
Concern about the “speed” of recovery
Caputo was not only concerned about the prices. He also admitted that the rebound in economic activity is being desired more than expected. “I am concerned about the speed of the recovery. We have the potential to be growing at 9% or 10%,” he said, contrasting with consumption that has not yet managed to rebound on the shelves.
For the official, competitiveness must come from lower taxes and not from the jump in the dollar. However, he once again set conditions to eliminate withholdings from the countryside: “If Argentina has a deficit, how is it going to finance it? With issuance? Cristina Kirchner is back,” he ironized, making it clear that the fiscal surplus is the “non-negotiable area” of his plan.
The paradox is evident. While for the consulting firm Ferreres core inflation has already pierced the 2% monthly floor (a long-sought objective), for Caputo the March CPI could be a “bitter pill.”
