Why is inflation going down in Argentina? Because it went up massively late last year. Why might inflation rise again in Argentina? Because it has been falling in recent months.
There's a recent research about it and economists find it interesting to couple with some historical data.
In inflation–adjusted terms, today the Argentine peso is more overvalued than it was in August 2023, when the Fernández administration was compelled to allow a one–time devaluation. This effect can be seen clearly in the shopping malls of neighboring Chile, mobbed with Argentine tourists who stock up on electronics, clothing, and even food products, thanks to the strength of what some are calling the “super peso.”
The world is currently showering praises on Milei for strengthening the economy but he has just strengthen the Peso.
The future of Milei’s administration rests on its ability to deliver lower inflation and higher growth. But the super peso will threaten growth once exporters decide they cannot make money by selling abroad. It could also threaten inflation control if the central bank is pushed into a disorderly devaluation, which would immediately feed into domestic prices
What do you say? Which way the camel sits?
Will the heroics of Milei's administration continue forever and make Argentina the best economy of SA?