“It is highly probable that inflation in September will be lower than that in August, but it appears that the decline will be moderate,” says a report in which also warns that The reduction of the PAIS tax did not impact the evolution of prices as much as expected.
“We continue with 3.5% for the monthbut we see that it could be a tenth higher. A few weeks ago the bias was the other way. Some tradables clearly fell or slowed, but salaries continue to run at least 4-5% monthly,” the consulting firm’s report indicates. Econviewsof Miguel Kiguel.
The document also criticizes the Government for “the moving target of exit from the stocks”. He maintains that the conditions for leaving the stocks change all the time. “Now it seems that inflation reaches 2.5% monthly to match the ‘crawling peg’ to which global inflation is added. Our criterion is that the value of inflation is irrelevant to get out of the trap and The government knows it,” he says.
“Our vision is that The Government is going to get out of the trap, but its business is to make the market believe that the panorama will not change“, says the Kiguel consultant. Although other views question what the purpose of that strategy would be.
The exchange gap
“The exchange gap can rebound if this opportunity is not taken advantage of“, is lower than what we thought.
And for the consulting firm, tax deadlines and tranquility in the market in general help. But he warns that, “to the extent that the restrictions continue and at the same time the restrictions determine an exchange rate that is not equilibriumit is very difficult to achieve the convergence that they desire in the government.”
Likewise, he adds, “we are not clear what the trigger will be, but we would not be surprised if some Substitute do not put the gap 5-10 points higher again in the coming monthss. “More so if, as the market believes, the exit from the stocks is postponed.”
Credit flies, but finds limits: the stocks
The report maintains that credit demand appears to remain firm and stocks continue to grow at double digits. “The problem is that banks are running out of liquidity.“Although they have public securities, part of them are used to integrate reserve requirements. In fact, in homeopathic doses the banks take active repos at a TNA of 45%, cThat hasn’t happened at any time in the last 20 years.
“All this seems to imply that cheap loans have little life left, unless the government decides to deposit into the system part of the pesos that it has channeled into the Central Bank,” adds Econviews.
This year the economy falls 3.5%. In 2025 it depends on the stocks
July data was good as expected expected, with an increase of 1.72% against June. But INDEC corrected the second quarter data downwards in line with the GDP that came out last week. With relatively moderate data for the last 5 months of the year we see a drop of 3.5% for all of 2024.
“This implies that there are improvements in the third and fourth quarters of 2024. For next year, we see a very positive year, but it is a necessary condition to get out of the trap“. That would enable a dynamic of financial and real investments that will undoubtedly be positive for the economy. And that only happens in an unrestricted exchange market.
In conclusion, although Milei proposes that the elimination of the stocks will occur when the inflation of the macroeconomic program reaches 0, current indicators do not show signs that this goal can be achieved in the short term. Inflation, stagnant around 4%, could barely drop marginally, making a reduction to the expected 2.5% monthly rate difficult.
Furthermore, although a reduction in Lefis is observed, which could alleviate the monetary base, “we remain skeptical regarding the unification of the exchange rate.” History suggests that the official market will tend to adjust to the parallelwhich raises serious doubts about the sustainability of an official dollar after the opening. “We will continue to monitor these dynamics in future reports,” concludes the Kiguel firm.
Source: Ambito
I am an author and journalist who has worked in the entertainment industry for over a decade. I currently work as a news editor at a major news website, and my focus is on covering the latest trends in entertainment. I also write occasional pieces for other outlets, and have authored two books about the entertainment industry.
