“If one saw how the inflation the first three weeks of December, one would think it would go to 30%. But last week it slowed down quite a bit and the first week of January too.“said the economist.
Now, Spotorno warned that “a second line of increases” still remainsso he projected that the inflation will end in 2024 above 250%, making Milei’s first year the highest price variation since hyperinflation, since it will exceed the 2023 figure (211.4%).
“In December you had an increase in fuels, prepaid, food. Now comes a second round of increase with professionals and employees. After, rates in March,” he listed, although he added that it would be pending to know “what will happen with the exchange rate and the devaluation.”
Inflation: three conditions to stop inflation
For Spotorno you have to “correct” the exchange rate either “get out of the stocks”. “One of the two, something must happen in the second trimester,” she said.
Also, he highlighted that “Leliqs stock is softening“and what if in the long run”the tax program works“Inflation is going to go down.
“There is a process that goes to disinflation, but first we must correct prices and ensure that the economic program is fulfilled,” he explained.
In this context, he explained that the program consists of three conditions: fiscal adjustment, solution to the Leliq problem and regulation of the economy to improve the growth rate.
“The key to the entire program is the fiscal one. If you manage to reduce the fiscal deficit, you will be able to lower inflation and the bonds will rise”he concluded.
Inflation in 2024 could be higher than in 2023
The City analysts They worsened the CPI forecast, to the point that they estimated 25% for January, and 213% year-on-year for all of 2024.
According to the BCRA’s REM, those who best predicted inflation in the past (Top-10) expected in the survey at the end of December a inflation of 25.5% for January and 201.5% yoy for 2024. Regarding the Core CPI, REM participants placed their forecasts for 2024 at 243.4% yoy
Likewise, they estimated that the CPI It would only return to one monthly digit by next June (8.3%), after projecting 18.2% for February, 15% for March, 12% for April and 10% for May.
Source: Ambito
