Analysts see March inflation above 4%, as Macri claims it has hit a peak

Investors will be on watch later today as Argentina publishes the latest data on its most persistent problem: stubbornly-high inflation.

Analysts surveyed by Bloomberg expect prices rose 4.05 percent on a monthly basis in March, and annual inflation will likely remain above 50 percent. The INDEC national statistics bureau will publish March inflation data at 4pm local time. Persistently high prices, government spending cuts and a currency crisis have largely pushed inflation in the past year as the economy fell into recession.

Argentina’s double-digit inflation is in the spotlight after consumer prices surged in January and February, prompting the central bank to tighten monetary policy in March. The Central Bank decided to keep its benchmark rate above 62.5 percent at least until the end of April and freeze the amount of money in circulation until year-end to cool consumer price increases.

The Central Bank’s latest survey of economists projected March monthly inflation to be 3.8 percent inflation and annual inflation to end 2019 at 36 percent, up from 31.9 percent in the previous poll.

Argentina’s spending cuts on subsidies for transportation and utilities have caused prices in those two categories to rise significantly. Food inflation has also been high.

President Mauricio Macri said Monday that inflation peaked in March, and his labour and production minister, Dante Sica, added that April’s numbers will be lower. Macri is also expected to announce a series of measures Wednesday aimed at providing relief to Argentines coping with annual inflation over 50 percent

Here’s what economists are saying:

Goldman Sachs (Alberto Ramos, head of Latin American economics): "A bad number would be something over 4.5 percent with core also well above 4 percent ... We are confident that inflation will eventually moderate, given the brutal recession and very tight domestic monetary conditions, but at a gradual pace"

Abeceb (Sebastián Martínez, macroeconomic analyst): "Food prices growing at 5 percent per month, 15 percent in 1Q and high inflation has hindered the recovery of purchasing power expected for 1Q."

Continuum Economics (Priscila Robledo, LatAm economist): Persistently high inflation "reduces the government’s chances for re-election." She added "we don’t expect inflation to slow significantly in April, either, keeping the need for high rates for a while."

Consultora Ledesma (Gabriel Caamano Gómez, economist): "Any number above 4 percent will be a negative surprise for the market."

JPMorgan (Diego Pereira, economist): "Beyond a level, the most relevant will be the factors that explain the evolution of price gains in March (food, regulated prices, services) and the spillover effect for April ... We believe the FX will perform well over the next few weeks, and the impact of utility price increases should start disappearing in May. This should bring inflation down to 2.8 percent m/m in May."

- Bloomberg