It is worth remembering that during that tour, the Minister of Economy, Luis Caputo, took advantage of his participation in the assembly to meet with investors and provide details on how the economic plan will continue. The head of the Treasury assured that inflation will continue to decline, He clarified that the unification of the markets is not imminent and said he has full political support from Javier Milei.
Werning expressed himself along those same lines, addressing several key issues. In addition to highlighting the progressive exit of the exchange rate, he emphasized the problem of inflation.
Werning assured that a marked trend of deceleration is observed ““significant” rise in inflation, exceeding previous expectations. “High frequency data indicates that in April the price index has fallen to single digits, while core inflation is in the mid-single digits, closer to 5% than 9% monthly.”
The authority recognized that this slowdown process is influenced by a central macroeconomic factor: restrictive policy (adjustment) has revived price-demand elasticity. In this sense, he warned that underlying inflation will be the subject of special attention during the rate adjustment process. Additionally, “the stages” of inertia are described: the initial impact on inflation due to the devaluation and the secondary impact due to the correction in the prices of services. In both cases, he highlighted that these impacts have been “less than initial fears.”
The promise of zero deficit and “V” recovery
Finally, Werning addressed the issue of the value of the dollar, arguing that real sectoral exchange rates reveal high business margins (and dispersed in dollars), which have a more relevant role than wages in determining the price level. TOFurthermore, he noted that changes in barriers to trade and competition could be additional drivers (or drivers), along with changes in taxes and bureaucracy.
In Argentina, the political commitment towards the goal of achieving a “Zero Fiscal Deficit”, led by Minister Caputo, represents a historical milestone by placing it in the 90th percentile of fiscal adjustments made in the last three decades, assured Werning.
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Regarding the prospects for change, Werning assured that the Government monitors the support of various sectors of society, opposition parties, the economy and financial markets. Economic and fiscal reform continues to be debated in Congress, while the private sector shows signs of being ready to contribute to a “V”-shaped economic recovery.
Finally, Werning addressed the issue of the value of the dollar, arguing that real sectoral exchange rates reveal high business margins (and dispersed in dollars), which have a more relevant role than wages in determining the price level. Additionally, he noted that changes in barriers to trade and competition could be additional drivers (or drivers), along with changes in taxes and bureaucracy.
Source: Ambito
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