JP Morgan considers that the “crossroads” by Argentina, that is, the elimination of exchange controls, was carried out successfully and without significant inflationary costs.
The renowned Bank JP Morgan said that the elimination of the exchange rate implemented by the Government of Javier Milei did not generate a significant increase in inflation. In a recent report, the Bank described this process as a “success”, pointing out that the transition to a regime of exchange bands and the elimination of “Crawling PEG” of 1% monthly did not imply relevant inflationary costs.
According to the analysis, the monthly inflation in April was 2.8%, below the 3.7%registered in March and the market consensus that provided for 3.2%. JP Morgan, meanwhile, projects that Inflation will continue to descend, reaching levels close to 2% monthly in the short term and drilling that threshold towards the third quarter of the year.
The report also highlights that Core inflation, which excludes food and energy, remained around 3% monthlywhile Seasonal and regulated prices showed moderate increases. These data suggest that current economic policy is managing to stabilize prices without generating significant inflationary pressures.
“In general terms, the unification of the exchange rate, the elimination of” 1% crawling “and the passage to bands, as well as the lifting of capital controls for individuals – what we have called ‘crossing the Rubicón’ – did not imply significant inflation costs. In addition, The evolution of the policy frame is expected to continue supporting the uninflationary path forward, a premise that we have repeatedly underlined in the past“The Wall Street giant said.
JP Morgan stressed that the deflationary process will depend on the maintenance of the new economic policy framework. In this sense, he observed that exchange stability and tariff reduction To imported products could contribute to contain inflationary pressures in the coming months.
Inflation data, key to JP Morgan
The report also broken down the nucleus component without food between goods and services, highlighting that Core goods inflation showed an acceleration in the last two months. The bank attributed it to the uncertainty prior to the implementation of the new policy frame and the early transfer of the exchange rate. But, he indicated that The rhythm of increase of these goods was 17.9% annualized And he foresaw that this trend will be reversed with the economic opening and the reduction of tariffs to imported products, such as cell phones and televisions.
The bank also said that the inflation of services was more persistent because it is less influenced by the exchange rate and more related to salary and growth dynamics. For this reason, he estimated that Its deceleration will be slower. As for the projections, the bank said that monthly inflation will quickly fall to the 2% environment and cross below that threshold in the third quarter. By December 2025, he maintained his inflation estimate at 26% year -on -year.
Source: Ambito
I am a 24-year-old writer and journalist who has been working in the news industry for the past two years. I write primarily about market news, so if you’re looking for insights into what’s going on in the stock market or economic indicators, you’ve come to the right place. I also dabble in writing articles on lifestyle trends and pop culture news.
