The government changed its annual inflation forecast to 62%, but it is still 10 points lower than private analysts’ estimates.

On the day of submitting the 2022 budget update, the government announced that it had changed its inflation forecast to be 62% by the end of the year. In this respect, the executive changed its estimate of inflation by almost 15 percentage points compared to the original agreement with the International Monetary Fund. In Gaza Rosada it is acknowledged that this is an “ambitious” objective They also promised that there would be no further measures in an effort to control inflation.

However, the new inflation in which the Ministry of Economy operates is 10 percentage points lower than the final survey (REM) prepared by the central bank between advisers, banks and investment funds.

He estimated that he had agreed with the IMF three months ago, at the beginning of the economic plan approved by the group, the range was 38 to 48%, the number lagging behind after the inflation peak in March, April and May. . Despite the intent of the economic group, Palacio de Hacienda was unable to recalculate inflation with a narrow ceiling and floor. And had to keep it at ten points.

In Gaza Rosada, they acknowledge that this is an “ambitious” objective and that there will be no further measures to try to control inflation.

“We understand that this is an ambitious goal and we cannot reduce the level of inflation. We would like to provide more details, but the display is very unstable. By the time the plan is established, the local component of inflation is shrinking. For the time being it is a goal and we want to ensure within this range, ”they explained from the official dispatch.

Officials expect the average price increase for this year to be 57.7%. However, highlighted InfobeThe figures are not part of the budget but are in talks with staff of the International Monetary Fund. Other aspects that were negotiated with the agency until a few hours ago, official sources assured, were the need to restructure quarterly reserves and financial targets.. Annual goals, they say, will be in place.

Next week on Friday, the government even expected it The IMF team will not only give the green light to review the numbers for the first quarter, they will consider the process as accessible, but also examine whether it will lead to restructuring. As proposed by the Executive Branch and the Technical Committee of the IMF.

In terms of reserve accumulation, it seems to be the most difficult target for the executive, the government promises The shock of international prices “compared” the logical sequence of foreign currency collections in the BCRA.This can usually be done on a large scale due to the dissolution of the agricultural export complex due to the weather.

In recent months, the executive has promised to include in the budget mandate the IMF’s logical spending and revenue plan – not in the bill sent by Guzman in September last year – a restructuring of inflation expectations. The government also released a document entitled “Policy Measures for Strengthening the Sustainability of Growth and Macroeconomic Stability”, A kind of roadmap for how the economy will fare for the rest of the year. The last increase in fixed time rates and

In addition, from the Palacio de HaciendaGDP is projected to grow by 4 percent in real terms. The government chose to keep the number within the range of economic variance explicitly stated in the agreement with the finance ministry, which forecast 4 to 5 percent GDP growth.

The new budget order, in addition, assumes that the rhythm of revenue and expenditure will follow the order of the new nomenclature close to 60 percent. The new international scenario will force the public sector to abandon its goal of reducing subsidies by 0.6% of GDP forecast on the roadmap with finance. Now, they estimate that pruning will not reach 0.05% of production.

In the context of rapid inflation – beyond the fact that the CBI peaked in March and the monthly indices have been falling since then – it is a question of whether the government wants to show wages this year. They have finished the annual race on top of the price hike.

They acknowledge the difficulties in government, especially in the field of informal employment, but They believe the renewal and renegotiation of the leading guilds will prevent a decline in the purchasing power of income.

“Looking at this dynamic and the path of inflation, we will adapt to the growth of real wages. If it does not happen, we will try to coordinate the process so that employees do not lose out. Overall, despite the recent months of inflation shock, real wages have not had a setback,” an official source said.

From Palacio de Hacienda, in addition, they estimate that GDP will grow by 4 percent in real terms.

The A set of actions The government announced this Thursday Budget upgrades in line with the agreement with the IMF on the tariff division system, the central bank’s interest rate hike and the restructuring of the Now 12 scheme.– seeks to create a “stabilizing” effect, they say from official offices.

In that sense, They deny that the restructuring of rates indicates an impact on the economyAlthough they agree, precisely for this reason, interest rates are below expectations, so they are still in fact fundamentally negative.

“They can’t say we have a contraction bias. We are gradually moving rates to mark a path and see after trauma what the medium and long path is,” an official source said.

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