(Bloomberg) — Argentine President Javier Milei’s economic team sees monthly inflation slowing much faster this year than analysts anticipate, a rare insight into his advisers’ projections as he tries to pull the country out of crisis.
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Consumer price increases are forecast to slow to 3.8% by September, according to a presentation seen by Bloomberg News that’s dated April 4 and authored by the office of Economic Policy Secretary Joaquin Cottani, a top deputy to Economy Minister Luis Caputo. Analysts surveyed by Argentina’s central bank in March saw monthly inflation at 6.2% by September.
Similarly, Milei’s team projects Argentina’s economy will contract 2.8% this year, less than the 3.5% drop seen by more than three dozen analysts polled by the monetary authority.
The Economy Ministry’s press office did not respond to a request for comment after business hours Tuesday. The report was presented to foreign investors during a trip to Buenos Aires, according to a person with direct knowledge, who asked not to be named discussing private meetings.
The document details Milei’s drastic austerity measures. Capital spending declined 85% in the first quarter from a year ago when adjusted for inflation, according to the projections.
Milei’s proposals provoked a large, peaceful protest Tuesday in Buenos Aires against spending cuts for public universities, which the president decried as a politically motivated event. His government slashed federal funding for universities by 72% in the first quarter, according to a data analysis by Buenos Aires-based consulting firm Equilibra.
In a separate report, Argentina’s central bank detailed projections for net international reserves — a key benchmark in the government’s $44 billion International Monetary Fund program and a barometer for lifting currency controls that deter foreign investment.
When taking into account the monetary authority’s short-term debt from bond auctions meant to facilitate imports, net reserves were negative $4.2 billion as of April 19, the bank said on its website Tuesday.
While net reserves were positive by a different criteria used by the IMF earlier this year, it’s unclear if the Washington-based lender will adapt its methodology to include the central bank’s new debt liabilities.
The central bank presentation was shown in Washington last week when Caputo, who publicly declines to provide forecasts in interviews with Argentine media, participated in events on the sidelines of the Fund’s spring meetings. Caputo’s comments at a JPMorgan Chase & Co. session there helped lift the country’s sovereign bond prices.
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