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Source: Buenos Aires Herald
The Central Bank yesterday finally issued an estimated inflation target for the years ahead — and it was a relatively ambitious one too — with chief Federico Sturzenegger vowing to cap price hikes during 2017 at between 12 and 17 percent, significantly below the average inflation figures over the last 10 years and also below current market expectations for 2017.
The announcement comes during a year in which President Mauricio Macri’s administration has struggled badly with inflation, after Finance Minister Alfonso Prat-Gay promised that the yearly rate would be between 20 and 25 percent for 2016, a figure which was surpassed with still some months to go before the end of the year.
Experts widely agree that inflation is unlikely to end the year significantly below 40 percent, with the projected 12-month rate above that mark at the moment, even though the government has managed to reverse its rising trend over the last few weeks.
Until yesterday, Sturzenegger had refused to set an explicit inflation target, only promising that as the head of the monetary authority he would do his best to steer “as close as possible” to Prat-Gay’s target of the last few months of 2016, leading many to speculate that the Central Bank chief didn’t think the minister’s forecast was realistic. Yesterday, however, the Central Bank also promised that inflation would fall to between 3.5 and 6.5 percent in 2019, and that in 2018, the government’s target would be between eight and 12 percent.
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