Mauricio Macri and inflation: how it happened in previous forecasts – 19/07/2018
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The latest inflationary spike triggered a campaign speech by Mauricio Macri on social networks. There, he boasted of the ease with which he could reduce inflation that Kirchnerism hid statistically . It is clear that he has not succeeded. This Wednesday, at a press conference, the president admitted the difficulty. But he is tempted with another forecast. Very tangible: "It will drop by more than 10 points next year". Will he? Up to now, there were at least four official predictions that were snubbed
2016: the first devaluation and a difference of 16 to 21 points
One of the measures that still today. The world and many local economists recognize Macri is the lifting of stocks, this lock that has almost completely prevented the transaction of dollars at the official price. The president decided to withdraw it at one go, partly advised by his then finance minister, Alfonso Prat-Gay.
According to the former manager, the devaluation would not be fully pbaded on to domestic prices as many companies had already done so. Kirchnerism, because they were handled with a parallel dollar more expensive than the official one. An badysis with little anchoring in local history. Thus, Macri and Prat-Gay (plus the chief of staff, Marcos Peña, as spokesperson) spoke of a band of 20 to 25 inflation points in 2016 . With inflation of 29.5% from one year to the next in June, the target set with the IMF was already exceeded "src =" https: //images.clarin. com / collections / static / lazy_square.svg "data-big =" https://images.clarin.com/2018/07/17/rJauZf27X_290x290__1.jpg "data-small =" https://images.clarin.com/ 2018/07/17 / rJauZf27X_110x110__1.jpg "observe =" "data-observer-function =" loadLazyImg "/>
But then, not only was the devaluation moved almost completely but the first rate of rights of the former energy minister, Juan Jose Aranguren, outright hit the price, even though it had to be tempered to avoid an untimely crisis.
for the disaster in the Indec that had left another pair (Minister Axel Kicillof's and Secretary Guillermo Moreno's), the Government took as a parameter the price index of the City of Buenos Aires, with own statistical direction. In 2016, the CPI of Buenos Aires closed at 41%, or between 16 and 21 points more than the official forecast.
2017: a trail with hills and a difference of 7.8 to 12, 8 points
With just under a year in power, in September 2016, the government sent its budget proposal to Congress . With the letter of the Minister still Prat-Gay but also with inflation parameters of the holder of the Central Bank, Federico Sturzenegger in which Macri has deposited his confidence to stop the price increase.
The draft budget set a band of 12 to 17 points for inflation for 2017. The last months of 2016 marked a downward trajectory: October 2.4%, November 1, 6%, December 1.2%. But over the course of the year, again rates and prices began to question the new forecast.
The question was whether he was closing above or below the symbolic number of 20%. When this limit was already discernible, the government changed its speech : Peña said that "the important one" was the downward trend and reiterated that 2017 inflation would be lower that's in 2016. And so it was, since it closed at 24.8, but with a difference between 7.8 and 12.8 points compared to the original forecast.
2018: the second devaluation, two forecasts and a difference between 15 and 22 points?
With the letter of Sturzenegger, and the decline of the result of 2017, the Central Bank has set an ambitious goal for this year: an inflation of 8 to 12 points . The government has still imagined it as a parameter to moderate parity. But quickly this band was ridiculed.
December had already closed above 3 points and with a dollar after the elections. The announcements of increases in transport rates – postponed by the election – and the energy pressurized so that at the end of 2017, in the middle of a strong Internal, Peña announced the change in inflation targets to get a little closer to reality: 15%
The sharp devaluation of April has thrown everything to hell and the annual forecast has been sprayed in six month. Peña has maintained, however, his optimistic speech: "Nobody doubts that inflation this year will be lower than last year." But less than a month ago, with the agreement signed with the IMF, the finance minister, Nicolas Dujovne, was already talking about an inflation of 27% for this year.
Up to June, 3.7%, the highest in two years, pushed badysts' forecasts to a 30% floor. The question is whether the brake on consumption will at least dampen the transfer of devaluation to prices.
If 30% is reached, will return to the beginning : a phenomenal phase shift, as in 2016. And not even with the consolation of having won the previous year.
In the government today, almost unanimous blames Sturzenegger for mistakes. But beyond the departure of this official, the context is difficult to cling to Macri's new prediction, which has sung less than 10 for 2019, to see if it ends the series.
