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Milei Admits Inflation Setbacks, Says Cuts Will Continue

Economists read a cautious turn that could slow the drop in inflation under strict IMF reserve targets.

Overview

  • Milei, in posts on X on Tuesday, said there were setbacks in lowering prices yet argued his team is on the right track and shared a chart to claim inflation is lower than what he inherited.
  • Official data show February inflation at 2.9% with a 5.9% rise across January and February, and private trackers expect March to top 3% due to higher school fees, utilities, fuel and clothing.
  • The president defended shrinking ministries and public payrolls, said there is still much to cut, and pledged to keep the same policy path despite criticism.
  • Some analysts, including former finance official Miguel Kiguel, see signs of a pivot toward reviving activity, which they say would slow disinflation as interest paid on deposits now trails expected price rises.
  • Consultancies report a large reserve gap under the IMF program, estimating about US$11.3 billion still needs to be built and flagging pressure from debt payments due in July, which keeps markets focused on how the government will find dollars.