Cavallo predicted that inflation will be 8% by April

Former Economy Minister Domingo Cavallo made an analysis in his personal blog of the country’s economic situation and Caputo’s plan, and said that for the month of April, inflation will be 8 percent. Many media economists are disappointed by the economic measures announced by Minister Luis Caputo because they do not constitute a stabilization plan like the one promised by President Javier Milei when he was a candidate,” Cavallo said at the beginning of his analysis.  In that sense, he praised Caputo for saying that campaign promises, such as dollarization or the elimination of the Central Bank, were not “discarded,” but will be implemented once the country stabilizes economically. Until the conditions are in place to launch the stabilization plan, it is very important to stabilize the real exchange rate at a level compatible with foreign trade without quantitative restrictions, without vestiges of anti-export bias and with a level of foreign reserves sufficient to support the monetary liabilities of the Central Bank.” According to Cavallo, “a reasonable assumption is that in December there will already be a realignment of relative prices by 16%, in January by 20%, in February by 15% and to exhaust itself in March with a surplus of 9%.” The inflation rate results from the sum of the realignment of relative prices plus the expansion of the Central Bank’s liabilities. From April onwards, the inflation rate is fully explained by the expansion of the Central Bank’s liabilities. It is estimated at 8% per month during the months of April to June and 7% per month from July to December,” Cavallo added.

Original source in Spanish