Caputo said February’s inflation will be closer to 10%

Luis Caputo said that in February inflation will be “closer to 10% than 20%,” which would mark a deceleration from the 20.6% recorded by Indec for the first month of the year. The economy minister defended the strong fiscal adjustment he implemented during the first month of the year and said that “it has no precedent in the world.” I think (inflation) is going to be closer to 10 percent than 20 percent. We’re going to see a substantial decline in fiscal and monetary control,” Caputo said. “It’s one thing to recompose relative prices and another to inflate. The good part is that if you take out the recomposition effect, inflation is coming down sharply,” he said. Regarding the exchange rate and the possibility that inflation is accumulating a backlog, the head of the Finance Ministry said that “many make the mistake of comparing the real exchange rate of the last tranche of the last government.” “The real exchange rate is a reflection of expectations, we were facing the worst economic situation in history. You can’t compare yourself against that kind of change. In any stabilization plan, the variables are rearranged. If you have a trade surplus, the exchange rate is going to appreciate. Inflation for now is coming down faster than the average economist expected,” he told La Nación+. When asked about a possible dismantling of the exchange rate clamp, Caputo said that first “the Central Bank’s balance sheet must be recomposed. The recomposition was very strong but the disaster was enormous. Not even the people’s dollars were there. As long as conditions remain favorable, it is a possibility,” he said in relation to the lifting of exchange controls. “The condition is not the date but the restructuring of the BCRA, hopefully it will take as little time as possible,” he continued. Meanwhile, Caputo anticipated that in the next few hours the minimum wage will be updated, which will have an impact on the amounts of social programs. The award after the lack of agreement between unions and companies last Thursday corresponds to the Ministry of Labor. The CGT had demanded an 85% increase in the wage floor. The amount would rise to $180,000 in February and $202,000 in March. “Between today and tomorrow we are going to set it, the minimum wage is a reference value,” he clarified. This would imply an increase of approximately 30%. A similar percentage, on the other hand, will be given to pensions and the AUH due to the application of the automatic formula that will be applied to March payments. Caputo said there will be another bonus, but did not specify how much it will have. “The formula for retirees has to be changed. If we continue with the political game of wanting to continue making use of retirement and so on with the Law, this will take longer. In the meantime we are going to give them a bonus and protect their purchasing power,” the minister said. Likewise, Caputo said that the Executive Branch could reintroduce the Omnibus Bill to negotiate with the governors a separate fiscal package, after the failure of the first attempt to deal with the Bases Law in Congress. From a fiscal point of view we don’t need it, from a structural point of view we do because it’s a change for the country,” Caputo said. “First let’s deal with the project and then we analyze the fiscal package,” he said. On the other hand, regarding the teacher incentive fund, which the provinces claim as part of the payment of teachers’ salaries in their governorates, Caputo said that “the Teacher Incentive Fund has expired.” “There are no national teachers. The teachers are provincial. If the provinces want to give a subsidy to education or transportation, they have to take it out of their coffers. If not, the nation is the dumb guy who prints pesos, distributes money and then we all pay the consequences,” he added. Regarding transportation subsidies, the minister asserted that “the Nation subsidizes interjurisdictional routes such as the one that goes from CABA to Buenos Aires. Province of Buenos Aires subsidizes its own routes. Interjurisdictional routes are national jurisdiction and those are subsidized.” There is a gray spot that is CABA, because it still has 31 lines that were not transferred. When the subways were transferred, for some reason they were not transferred. It was arranged with CABA that 45% subsidizes the Nation and 55% CABA. What we are promoting is to give more entity to the Metropolitan Agency so that it takes on greater entity and that they resolve between CABA and the province, and the Nation can get out of the transportation issue,” he clarified, in response to the rumors of a withdrawal. Finally, Caputo said that “we predicted that the country was going to start growing in 2025. Today we see it with more optimism. We already believe that in the last quarter of 2024 we are going to start seeing growth.” “It’s heroic what he’s doing making people. I feel it and I live it in my own flesh. I don’t have any political ambitions, only a vocation for service. What interests me most is people. I can only express my gratitude. The best way to explain to them is that the effort is going to be worth it, it’s going to be as short as possible, and they’re going to be better. Argentina is going to change as a country,” he concluded.

Original source in Spanish