Milei’s team sees inflation slowing faster than economist survey

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.

Consumer price increases are forecast to slow to 3.8 percent by September, according to a presentation seen by Bloomberg News dated April 4 and authored by the office of Economic Policy Secretary Joaquín Cottani, a top deputy to Economy Minister Luis Caputo.

Analysts surveyed by the Central Bank in March saw inflation at 6.2 percent by September.

Similarly, Milei’s team projects Argentina’s economy will contract 2.8 percent this year, less than the 3.5 percent drop seen by more than three dozen analysts polled by the monetary authority.

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 matters.

An Economy Ministry spokeswoman said Wednesday the projections aren’t official because they weren’t published online and in Spanish.

Cottani’s report details Milei’s drastic austerity measures. Capital spending declined 85 percent 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 percent in the first quarter, according to a data analysis by Buenos Aires-based consulting firm Equilibra.

Beyond spending cuts, ministry officials project an Us$18.7billion trade surplus this year. They also predict the peso’s real exchange rate — a metric comparing the peso’s value to other currencies — will be 17 percent below its average of the past decade if the Central Bank maintains its slow devaluation, or crawling peg, of two percent per month.

In a separate repor t, A rgentina’s Central Bank detailed projections for net international reserves — a key benchmark in the government’s Us$44-billion International Monetary Fund programme 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 US$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.