Buenos Aires Times

economy From 10 to 15%

Gov’t fends off attacks over backtrack on 2018 inflation target

The news added impetus to the dollar's seemingly endless rise. The greenback leapt over the 19-peso mark ending 19.46 pesos on Thursday.

Friday 29 December, 2017
The Central Bank on Thursday yielded to pressure to lower its 2018 inflation target from 10 to 15 percent. The announcement is seen as a significant defeat for Central Bank chief Federico Sturzenegger.
The Central Bank on Thursday yielded to pressure to lower its 2018 inflation target from 10 to 15 percent. The announcement is seen as a significant defeat for Central Bank chief Federico Sturzenegger. Foto:Télam

More Economy News

As the government backtracked on its inflation targets for 2018, the dollar leapt over the 19-peso mark to end at 19.46 pesos on Thursday.

“Out of control and in demand until the end”, was how exchange brokers ABC Cambios described the “unstoppable” dollar, via Twitter.

In one month, the peso has lost 10.4 percent of its value.

Despite significant legislative wins in the Senate this week, the government was forced throughout the final work day of the year to hold off attacks from opposition leaders and the country’s most prominent economic gurus.

Cabinet Chief Marcos Peña told Radio Con Vos that the government “is absolutely certain” that “Argentina is going to grow next year”.

“We don’t see any reason to believe that the economy is going to fall into disarray. There is no concern,” he said, defending the government’s decision to force the Central Bank's hand on 2018 inflation targets.

A BLOW FOR STURZENEGGER

The Central Bank had eyed off a target of 17 percent for 2017, but to date official annual inflation sits at 24 percent.

Yesterday’s announcement was seen as a significant defeat for Central Bank boss Federico Sturzenegger who had resisted moves to lower the 2018 target from 10 to 15 percent.

Interest rates are now expected to fall as the government focuses less on the mother of all battles, an abrupt and permanent decrease in inflation, and more on economic growth.

Official 2018 predictions, as established in the Budget, are for an annual economic growth rate of 3.5 percent.

That same figure had been set for 2017 by former Economy minister Alfonso Prat Gay, with signs now pointing to a final official growth rate this year of 2.9 percent.

-TIMES

Poll

Op-Ed

Top Stories

  1. 1'Suspected anarchists' carry out two attacks in Buenos Aires; Police arrest 13'Suspected anarchists' carry out two attacks in Buenos Aires; Police arrest 13
  2. 2Standard and Poor's cuts Argentina debt rating
  3. 3Government seeks currency swap from China to boost reserves
  4. 4Techint boss paid Kirchner officials to chase indemnity from Chávez gov't: testimony
  5. 5IMF predicts brighter Brazil economy in 2018-2019
  6. 6New global fertility study reveals 'baby bust' in richer countries
  7. 7Magical Messi, a talent both abstract and unique
  8. 8Police suspect 12-year-old girl's suicide linked to WhatsApp terror game Momo
  9. 9ARA San Juan: Relatives of missing officers call on Ocean Infinity to search new site