May 17th, 2024


1. Inflation and basic food basket indexes released

In April, inflation continued its easing trend: the consumer price index measured by INDEC was 8.8%, reaching 65% so far this year and 289.4% year-on-year. Thus, due to the battery of inflation-fighting measures implemented by the Government, official expectations are that price increases in May will be even lower. INDEC reported that a family of four needed $828,158.19 that same month in order not to be poor. Meanwhile, the basic food basket (CBA) rose 4.2% and a family of four needed $373,044 to not be indigent. In the last 12 months, the total basic food basket (CBT) rose by 307.2% and so far this year it has increased by 67%. With respect to the previous month, the increase was 7.1%. The CBT for an adult. The basic food basket, on the other hand, registered an increase of 4.2% over the March index and 55% cumulatively in the first four months of the year, with a year-on-year jump of 296.2%.

Clarín: La inflación de abril fue 8,8%: volvió a un dígito después de seis meses
Infobae: Una familia tipo necesitó ganar en abril 828.158 pesos para no ser pobre

2. The Bases Law in committee debate in the Senate

After being approved in the Chamber of Deputies, the Bases Law passed to the Senate to continue discussions, with presentations currently being held. However, the debate in the Senate is taking longer than the government expected. In the first place, the pro-dialogue bloc has presented (and is expected to continue presenting) several final proposals for the bill, which have delayed the debate. In addition, it seeks to modify some points, such as the Income Tax and the Incentive Regime for Large Investments (RIGI); and the legislators claimed that the Casa Rosada has sent different interlocutors to dialogue, which hindered communication. In view of these claims, the government will have to sit down to negotiate those points that hinder the progress of the law. The government wants to speed up the treatment of the bill in order to be able to sign the May Pact on May 25, which is rumored to be postponed due to the delay in the debate.  

Infobae: Ley Bases y paquete fiscal: finalizan exposiciones en el Senado y dialoguistas piden no apurar dictámenes

3. Argentina approves IMF’s eighth review 

The International Monetary Fund (IMF) approved the eighth technical review of the Extended Facilities Program with Argentina. This will allow the IMF board to make a disbursement of US$800 billion. The technical team confirmed that the primary surplus was four times higher than expected when the Extended Facilities credit was agreed; that the Central Bank’s reserves totaled more than US$2 billion in excess of what was stipulated; and that monetary issuance was within the limits set. In a statement, the IMF said: “On the basis of better than expected results – all performance criteria for the first quarter were over-achieved – IMF staff and the Argentine authorities reached an understanding on policies to further strengthen the disinflation process, rebuild international reserves, support the recovery, and keep the program firmly on track.”

Infobae: El FMI aprobó la revisión técnica de la Argentina y enviará un desembolso por casi USD 800 millones

4. Chief of Staff addresses the Senate

By constitutional mandate, the Chief of Cabinet of Ministers, Nicolás Posse, presented his management report before the Senate of the Nation. There, he presented the progress of the Libertarian administration before a hostile audience. Among other points, he highlighted the priorities of the government and emphasized that one of them is the order of the economy. He said that a 3.5% drop in GDP, a $1,016 dollar – that is, a controlled devaluation of 2% per month – and annual inflation of 139.7% are projected for this year. The Chief of Cabinet also took the opportunity to deepen the attack against social organizations and piqueteras, by cataloguing them as “a scheme of modern slavery.” Senators posed questions after the official’s initial argument. Posse read the answers from the sheets of paper that his team handed him from the Blue Room of the Legislative Palace. Among other issues, the legislators asked him about the privatization of public companies, specific works in their provinces and some specific programs, such as the one aimed at reducing teenage pregnancy.

La Nación: Ante el Senado, Posse dijo que el Gobierno proyecta un 139% de inflación interanual y una devaluación de 2% mensual

5. Javier Milei presents to businessmen at the Inter-American Council for Trade and Production (CICyP)

This Wednesday, President Javier Milei addressed businessmen at the Inter-American Council of Commerce and Production. In his speech, he spoke about his government’s monetary and financial policy. The main topic was the brake on monetary issuance and the reduction of inflation. “I will call Toto ‘chanchito de yeso’ (plaster piggy): to get a mango out of him you have to break everything, which I endorse. He is unbreakable. If someone wants to break him, he has to break me first, because I will not give away the fiscal result,” he said about Luis “Toto” Caputo, Minister of Economy, and his fiscal policy. Besides, Milei commented that his intention is to reduce public expenditure to 25% of the GDP in order to return taxes to the private sector and, in this sense, he anticipated that a possible scheme could be to first eliminate the country tax, then the withholdings, and finally the levies on bank credits and debits. Regarding the cepo, he said that the pass-through problem is over and the problem of the Central Bank’s puts (options to purchase securities by the monetary authority) is being solved. Regarding the exchange rate, he specified that they are trying to “match” the flow of foreign currency funds with the demand (import payments and retained company profits). The President considered that he is very close to the elimination of the dollar peg. The businessmen who attended supported the President and highlighted his commitment to the promises he made.

Ámbito Financiero: Javier Milei explicó a empresarios cómo salir del cepo, fortalecer el peso y cerrar el BCRA