Once, in November 2022, after three months of falling inflation, Sergio Massa He was encouraged to predict that the price index would be at 3 points in April 2023. The optimistic calendar did not foresee any uncertainties: the drought came, which affected the inflow of dollars, deepened the crisis and, according to Economy’s arguments, has broken the forecast that inflation will start the election season with lower and less severe inflation than in 2022. “We were doing well, but the drought killed us: in November it was 4.9%, as I said, it would continue to fall but …”, they explain in Economía, remembering this sequence .
Ten months later after I knew that highest number in 32 years, with a monthly price fluctuation of 12.4%, Massa believes once again that he can reverse this process that some, such as the bloc of JxC deputies (as they emphasized in a chat via Zoom), can reverse Daniel Artana, right hand of Carlos Melconian Candidate for the post of minister Patricia Bullrich) identified as a “pre-hyperinflation” climate. On another dimension, Massa believes that the August figure was almost “miraculous” considering that the devaluation was 22%, which was also accompanied by a planned transfer –Crawling peg– 8 points.
Optimistic to the extreme and convinced that part of his electoral fortunes are at stake in this process, Massa delivers to his entourage an almost movie-like forecast: that the CPI for September will be below 10 points and that for October below 10 Points will be as known before the runoff election, it will be halfway through August. That means a return to the values from last June/July. It would be an abrupt, at first glance, unprecedented decline, in a rarefied climate, accompanied by inertia inflation, but which, moreover, can throw the government into turmoil through the injection of resources implied by the latest official measures: the fixed amount, the premiums for pensioners and AUH beneficiaries, the reduction in income tax and, above all, the refund of VAT with a limit of 18,800 pesos per month, which will reach more than 15 million people.
The entire official bet is based on price control and that the devaluation has been cushioned. At first glance it seems excessive. From a policy perspective, it is risky because, while it offers a calmer future in the short term, it also risks that an overly premeditated pattern becomes problematic. Massa also claims that with the blue dollar he is better prepared to avoid sharp jumps, which he attributes to malicious market operations. At their side, they talk about how the caves work, about the “corretas” and the operators and about the case of a key player in the device who had to flee the country wanted by the justice system.
Series
Massa’s forecast, whose sole electoral purpose is to change the economic climate, faces several difficulties. A simple reason is that estimating a 50% drop in inflation in two months is considered, if not impossible, at least unlikely. Second, operationally: if this were to happen, due to the dynamics of data dissemination a month later, the hypothetical INDEC number, reflecting that inflation was around 6 points in October, would not be known until November.
Unless what happened this Friday: Gabriel Rubinstein, Deputy Minister of Economy, reported that the Economic Policy Secretariat will begin reporting weekly inflation data every Friday. This week it announced the figure for the first week of September, which it estimated was 2.1%. Monthly it would reflect the guideline given by Massa that the September value is below 10 points. The report cites data from INDEC and “other sources.” There will be some who accuse economics of resorting to creative mathematics to reflect this data.
“Although the weekly value is still very high, it is now much more in line with the pre-devaluation values in August. We expect that the weekly inflation records will strengthen and consolidate their downward trend in the next measurements,” indicates the secretary via her Twitter account.
With this mechanism, if Massa wants to influence the agenda and change the mood, he can predict the inflation data – projected, possibly controversial – and show the decline that his team will transmit before the INDEC has to report in November. the October dates.
