The “Indec affair” represented the first shock for the Government in a year that had started very well financially.The Central Bank buys dollars every day, the accumulation of reserves advances and the country risk fell to 500 basis points.However, the decision to cancel the new inflation measurement almost immediately, and the resignation of Marco Lavagna, head of the statistical agency, generated a lot of noise and also led to hasty conclusions.
M%C3%A1s%20all%C3%A1%20of%20some%20rumors,%20was%20little%20serious%20the%20argument%20that%20the%20inflation%C3%B3on%20January%20with%20the%20new%20%C3%ADindex%20was%20located%20by%20above%20of%203%%20and%20because%20that%20%20decided%C3%B3stop%20the%20new%20%C3%ADindex.%20In%20reality,%20the%20differentcia%20between%20the%20basket%20of%20expenditurecorresponding%20to%202018%20versus%20the%20of%202004%20difiThey laughed%20el%20a%C3%B1o%20past%20some%202percentage points:%2033.6%%20versus%2031.5%.%20As%C3%AD%20lo%20estim%C3%B3%20the%20University%20Di%20Tella%20atrav%C3%A9s%20of%20su%20%C3%ADindex%20of%20%E2%80%9Cinflation%C3%B3n%20latent%E2%80%9D,%20which%20weights%20each%20item%20of%20agreement%20ala%20encost%20of%20spending%20of%202018,%20that%20now%20the%20Government%20doesn’t%20want%20to take%20into%20account.
Beyond the explanations of Luis “Toto” Caputo, something remained floating that seems very obvious: the new index, when calculating a greater weight of services, should give a higher value than the current one, which puts much more weight on the basket of goods.
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The second quarter will not only be very relevant for the economic plan due to the challenge of showing good results in the fight against inflation.Furthermore, expectations are placed on the liquidation of the large harvest and the rain of dollars that will arrive from the end of April.
The Central Bank has already purchased USD 1.3 billion and is expected to significantly accelerate the pace of daily purchases.It is not only about strengthening the Central Bank, but at the same time achieving an additional drop in country risk.
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The trade agreement signed with the United States is another favorable piece of information in recent days.On the one hand, it consolidates the Government’s vocation for economic openness.And at the same time it would have an immediate effect, which is a strong increase in meat exports to that country.The annual quota would increase from 20,000 to 100,000 tons, so sales would quintuple to more than USD 1.2 billion annually.In addition, Argentine exports will have a strong reduction in general tariffs for exporting to the United States, leaving them in a privileged situation compared to the rest of the world.
The IMF mission, which arrived in Argentina on Thursday, should also give support to Javier Milei’s management, including a disbursement of USD 1 billion.
Although the Government failed to meet the December reserve accumulation goal, “Toto” Caputo was already in charge of rehearsing the explanation: it is all the fault of “riskokuka.”
For now, phase 4 is going according to plan or even better.Not only does the Central have room to buy dollars daily, but the exchange rate fell in January and continues to do so in February.The retail dollar that started the year at $1,495 closed on Friday at its lowest value of 2026, at $1,450.
Exchange stability is a symptom of the recovery in demand for money.The pesos that the Central Bank is issuing to accumulate reserves, at least for now, are not going to put pressure on the dollar.This suggests that there is much more room to continue strengthening the BCRA’s balance sheet.
At the same time, short-term interest rates are also falling, so it is not necessary to tempt savers with exaggerated premiums to keep them in pesos.
The markets gave a scare last week, with sharp falls especially in software companies and Bitcoin.Argentine stocks and bonds felt the impact, but on Friday there was a partial recovery that brought some relief.
Investors will closely follow what happens with the discussion of labor reform.The Government wants to give a strong signal and will seek to have it approved without changes.The governors, however, resist the reduction of the Income Tax included in the project, which generates an impact on their income already thinking about 2027, an electoral year.
After a good start to the year, there are still many unknowns to reveal. The first is whether the Government will be able to successfully advance the disinflation process throughout 2026.
The other big question mark has to do with activity level.For now there are no very clear signs regarding what the expansion of the economy will be like and to what extent people will feel it in their pockets.It is, without a doubt, the most challenging aspect that the economic team will have to face and that will be addressed by the main directors of the UIA when they meet this week with Caputo.
