Argentine government data released today showed a slowdown in the pace of rising consumer prices during the month of May, as the inflation rate reached 1.5 per month and 43.4 per cent year on year. Bloomberg News indicated that analysts cautioned that the economic stimulus measures of the government of President Alberto Fernandez could lead to a high rate of inflation during the coming months, because these measures are largely funded through the expansionary policies of the Argentine Central Bank, which turn into a decline in foreign exchange reserves I have the country.
The Argentine government said that it intends to pump 1.7 trillion pesos (24.5 billion dollars) into the economy during the second quarter of this year, which is equivalent to twice the value of cash in the financial system of Argentina now.
The economic team of President Fernandez has recognized the limits of financing the stimulus measures, and its members insist on absorbing a quantity of cash in the local currency from the market to limit the effect of the expansionary monetary policy on prices and to prevent them from rising too strongly.
This comes as analysts, who were polled by the Central Bank, expect the inflation rate to rise to 4 percent per month by next October, and to 51 percent annually.
–
