The expectations in the last month oscillated, but they still did not find a stable comparison parameter. Until the second week of April, the economy seemed to be in a labyrinth: if the exchange system flexible, inflation could be triggered, but if it did not, uncertainty already hit the gap, with its consequent uncertainty, it rises from the country risk. And in Argentina, all that translates into inflationary expectations. But the trend changed its course.
Prices. The April CPI was 2.8%, a relief after 3.7% in March. With the dollar half to under the bands, the fall in seasonal prices and a lower impact of regulated, core inflation was 3.2%. For May, the price survey carried out by the Eco Go consultancy shows a new moderation with a rise to 2.2% monthly, but an inflation close to 3.1%.
April returned to register a primary and financial fiscal surplus ($ 0.8 and $ 0.6 billion, respectively), which leads to the accumulated primary result of the year to 0.6% of GDP and 0.2% in the case of the financial. “Punctually in the month there is a moderation in the rise of primary expend indicates the report of Marina Dal Poggettodirector of Eco Go.
In its weekly report, the Invecq consultant stressed that with the objective that the deflation continues to progress, “The Government moderates the rhythm of adjustment of relative prices and pays more attention to what happens with the peers.” For example, marks that regulated prices had in April the slightest variation of the Milei administration. Thus, taking as reference the current relative price structure and that of the first half of 2019, the most lagging items are the ones that corrected their delay at the beginning of the management. By the end of last year there were different adjustments between the price of goods and services, in which public rates and salaries in general weigh more. But as priority is disinflation, ceilings arose to the peers or the delay in their validation. The case of trade employees ( +5.4% of the April-June quarter was not approved) is only a relevant case within this policy.
The salary index of the INDEC He shows that the registered private salaries arrested their ascending march April 2024-April 2025, while the public sector did not yet recover what was lost in the end of 2023 and accumulated a slight fall in the first four-month period, but accumulated real setbacks in three of the last four months.
Protagonist dollar. Lorenzo Sigaut GravinaConsultant’s economist Balanceshe points out that a month after leaving the stocks and exchange unification, it is noted that the real exchange rate (TCR) for the importer depreciated slightly (+4%); Minimally for the exporter (-1%) for the liquidation of the “blend” and significantly for tourism or exterior expenses (-17% if purchased with the official dollar). The April commercial balance was US $ 204 million, (US $ 1.6 billion less than the same month of 2024), the result of exports for US $ 6,664 million (+2.3% year -on -year) driven by higher volumes (+3.2%) and imports for US $ 6,460 million, which implies+37.2% corresponding to the same month of the previous year. But in this case, the import boom was mainly due to the increase in imported amounts (+41.9% year -on -year). “If we draw seasonality, April’s commercial balance was practically null (+US $ 18 million)”concludes.
Jorge Vasconceloschief economist of IraL, points out that the exchange band regime is translating into a more “managed” scheme than “flotation.” In any case, if during the second half of this year the alignment of the evolution of the price of the dollar can be reached with the values that mark the future contracts, the average real exchange rate will be located at the levels of December of 2024. In the era of the “administered flotation” the price of the dollar (in real terms) will be at the levels of the “exchange anchor” time.
According to estimates of IERALthe current payment balance account showed a US $ 6.3 billion surplus in 2024 and this year is projecting a deficit of about US $ 8,000 million. This would mean that to continue with this rate of activity and without other change, the economy will need increasing additional capital flows to what the central bank requires to rebuild reserves as it was committed to the agreement with the IMF. “Resting (temporarily) again to the exchange rate is a way to underpin the disinflation objectives, paying less costs in terms of activity level (versus the option to harden monetary policy and raise interest rates)”underline.
Within this framework you can register initiatives to facilitate the use of “mattress” dollars to buy goods and the start of the remuneration of dollars in dollars, as some entities have already started it during the week with a 2% annual reasonable for free availability funds. At least it is a start.
The government maintains the focus on reducing monthly inflation below 2%, even if that implies deviations from the agreement with the IMF. The strategy is clearly subordinated to the electoral calendar and seeks to consolidate conditions to advance with the next stage of the program.
Production. If there is a relevant sector for the generation of currencies that do not abound and that faces a fall in profitability margins is the agricultural. The situation of cessation of payments of some actors within the sector (Red Surcos / Agrofina / Los Grobo, etc.) is only the tip of the iceberg. An exhausted management model or the sum of exogenous factors? The fall in international prices, the appreciation of the exchange rate, the increase in local costs measured in dollars, the sustained fiscal pressure and an adverse climatic situation, also pay this theory. The economist and producer Juan Soldano Deheza He maintains that this business model is not in crisis, but that some of the members of the ecosystem will enter into this situation of poor business decisions. “There will be collateral damage of magnitude to be determined and an exit of some actors, but that do not invalidate the model as developed until today, although with cost adjustments and in their financial structure to continue being viable”he warns.
In short, as Basqueconcelos points out, “The entire current economic scheme needs to combine credibility, electoral results and accumulation of reservations to facilitate the lifting of the stocks to companies without generating turbulence”. A true precision mechanism not to alter the delicate equilibrium amid the expectations generated by the government itself.
