The three conditions of the economy can slow down inflation for the remainder of 2019

After accumulating 15.6% in the first four months from 2019, six percentage points above on the one reached during the first four months of 2018, it remains to be defined during the tough election year if inflation may be lower than last year.

The latest survey of market expectations (REM) who performs the central bank Analysts consulted predict a general increase in the prices of 40% for 2019, some eight percentage points less than in 2018 and similar to that of 2016. In addition, they expect that in the second quarter, inflation will be 2.6% on a monthly basis and will decline over the last four months of the year to set at 2.1% per month.

In favor of the 2019 projections, a violent jump in the exchange rate is not expected. In 2018, the price of the dollar soared from April 25 to September 28 to complete a 102% increase in twelve months from 2018. Now with a 19% increase until now in 2019There is no horizon of devaluation of the peso of great magnitude.

There is a official bet for the exchange "anchor": that the price of the dollar does not accelerate faster than inflation. To this end, he has the IMF loans for the remainder of the year (approximately $ 10,800 million) and the authorization given by the credit agency to BCRA to intervene in the market and the Treasury to allocate a total of $ 9,600 million this year to the 'offer.

"Expectations – and after the new adjustment of monetary policy – aim to finally show downward trend since May to June. So there will be what to expect, summarized from Personal Portfolio Investments.

"For now, we expect inflation in 2019 to end the year. below 2018. Deceleration is expected mainly due to the sharp rise in prices regulated of the economy was left behind, while no significant jump in the exchange rate is expected in the coming months. Inflation could fall between 2 and 3% per month by the end of the year, "he said. Gabriel Zelpo, Chief Economist at Elypsis.

Another point which announces a moderation of retail prices concerns the Central Bank's commitment to maintain the "zero" growth of the monetary basewhich is the currency with which the economy works and whose expansion stimulates demand for goods and services and therefore inflation.

After more than eight months of stability from the monetary base, from October of last year, the monetary tightening effect, with interest rates above 70%, I should feel clearly.

On the other hand The government has given way to freezing tariffs from June, a powerful inflationary factor, due to the transmission of the increase in regulated prices to the rest of the economy, because of rising costs.

The suspension increases until the end of the year for electricity, gas and transport excludes those already announceds. Rates of buses, metropolitan trains and tolls they have a significant impact on the domestic consumption basket. It is added until September 15th the freezing of prepaid invoice lines cell phone.

It must also be considered that, as of April 22, the government has promoted a Agreement "Essential Prices" with 16 large companies, which reaches 60 core basket products, lasting six months, and which can help moderate the rise in inflation in the short term.

The initiative has been complemented by a program of discounts in large supermarkets for the beneficiaries of ANSeS and also a 70% reduction on the prices of medication for recipients of universal child transfer (AUH).

"It's a very unstable scenario, but the projection for the whole year, it could be 40%if, in May, it is in the range of 3.2 or 3.5%. There should be an average inflation of 2.7% in the second quarter and 2% per month in the third quarter, "said badyst and economics consultant Damián Di Pace.

"For this to happen, the government should have successful by positioning yourself in your strategy to have aRate of inflation in the exchange rate. If new turbulence occurs, it is very difficult to predict this scenario, "added Di Pace.