South American Politics thread - Page 66

BUENOS AIRES, March 8 (Reuters) - Argentina's monthly inflation reading likely slowed to 15.3% in February, still painfully high but down sharply from a peak in December, as new libertarian President Javier Milei's austerity drive squeezes shoppers, helping rein in grocery price rises.

The forecast, the median from a Reuters poll of 13 analysts published on Friday, would mark a deceleration from over 20% in January and 25% the month before when Milei took office and sharply devalued the peso currency.

Milei's government, battling the highest inflation rate of any major economy worldwide with annual price rises running at over 250%, is trying to stem the flood with a major cost-cutting drive and tight monetary policy to mop up pesos.

That has helped strengthen the currency, put the brakes on prices and buoyed markets that are keen on Milei's pledge to overturn a deep fiscal deficit. But it has come at the cost of growth, with stalling consumption and production.



"Food and beverage prices... rose significantly below the average: 11% in February," said consulting firm C&T.

Analysts cautioned however that February's reading was likely helped by a delay in expected price hikes to utilities.

"The February price index benefited from postponements of tariff increases," said local economist Luis Secco, adding that those rises would likely come into effect in March and April.

The government has previously guided that February inflation would be "closer to 10% than 20%", while Milei earlier this week said it would likely come in around 15%. The estimates from analysts polled by Reuters ranged from 14% to 17%.

The official INDEC statistics agency is scheduled to publish inflation data for February next Tuesday.

The Mexican Embassy in Quito remained under heavy police guard late Friday.

A day earlier, tensions between the two countries escalated after Mexico’s president made statements that Ecuador considered “very unfortunate” about last year’s election, won by Ecuadorian President Daniel Noboa.

In reaction, the Ecuadorian government declared the Mexican ambassador persona non grata.

Argentina's inflation "is coming down a little faster than initially expected," International Monetary Fund (IMF) managing director Kristalina Georgieva said Thursday.

The remarks were the latest in a string of IMF praise for President Javier Milei’s government in recent weeks. They arrived hours before Economy Minister Luis Caputo met with Georgieva’s deputy, Gita Gopinath, in Washington for talks on Argentina’s US$44.5-billion credit programme.

The multilateral lender has been vocal in its support for the new government since the libertarian leader’s arrival to office last December.

The IMF still expects inflation to exceed 150 percent this year, though it forecasts a considerable slowing in 2025.

Despite high year-on-year inflation, price increases moderated for a third consecutive month in Argentina in March, reaching 11 percent, according to data from the INDEC national statistics bureau

Though many citizens are struggling to make ends meet, Georgieva seems satisfied with Milei’s fiscal adjustment.

"Argentina, a country that has long been perceived as a laggard from the point of view of reforms, is now moving very quickly in adjusting fiscal spending, gaining the capacity of private investment," she said during a press conference in Washington this week.

Nevertheless, both the IMF and the World Bank have warned the Milei government not to leave “the most vulnerable” behind. More than half of the population lives in poverty and social unrest is growing in response to fierce austerity and a wave of public sector lay-offs.

The remarks were delivered prior to Caputo’s meeting with Gopinath, the IMF’s deputy managing director Gita Gopinath for talks. The “wide-ranging conversation,” as an Argentine diplomatic source put it, involved the discussion of Argentina’s economic targets for the first quarter.

The goal of the Argentine delegation, which includes Central Bank Governor Santiago Bausili, is to convince the IMF and the US Treasury to extend its current US$44.5-billion credit programme, so that the country can access fresh dollars to accelerate its exit from capital controls. Milei has previously said that Argentina needs to raise around US$15 billion to facilitate the move.

Initial reports described the 30-minute encounter between Caputo and Gopinath as relaxed and good, but sources played down expectations that the IMF will dish out fresh funds to Argentina to increase Central Bank reserves and speed its exit from currency controls.

IMF spokespersons said that idea was “premature,” while Argentine officials said the issue had been parked for future discussions.

Earlier this week, IMF economists forecast that Argentina’s economy would contract by 2.8 percent this year, before returning to growth in 2025.

As for Latin America in general, Georgieva applauds the fact that countries have put their policies in order, "which have allowed them to reduce inflation faster" than elsewhere.

BUENOS AIRES, April 30 (Reuters) - Argentina's oilseed sector workers lifted their two-day strike late on Tuesday after the lower house of Congress approved contentious reforms backed by President Javier Milei but opposed by some unions.

Business at the South American country's top grains ports had been paralyzed by striking union workers, holding up shipments of soy, corn and wheat from one of the world's top farm exporters.

Activity at the shipping hubs in Rosario, the key agricultural export area, was beginning to normalize by Tuesday evening.

"We're lifting the action now," Daniel Succi, secretary general of the SOEA oilseed worker union, told Reuters.
Next week a union meeting will be held "to see how we proceed," he added.

On Monday, oilseed and maritime worker unions kicked off a strike to protest labor reforms backed by Milei, which lower house lawmakers approved alongside a package of fiscal measures on Tuesday.

The two groups later lifted the strikes, though oilseed union workers hinted that another work stoppage could come when the Senate takes up the contentious reforms.

Gustavo Idigoras, head of the grains exporters and processors chamber, confirmed that earlier on Tuesday all port operations had ground to a halt.

Argentina is a major world supplier of processed soybeans. Revenue from grains shipments are a major source of foreign currency needed to pay down debt and finance imports for the cash-strapped government during a prolonged economic slide.

The union federation comprising other maritime and river workers that also protested the reforms lifted its strike midday on Tuesday, said Leonel Cardozo, the Timbues regional delegate of the SOMU Maritime Workers Union.

Milei took power four months ago pledging to slash public spending and stave off hyperinflation, but his reform push has faced stiff resistance from center-left opponents.

The bills on the table include provisions to lower the threshold for salaries subject to income tax, part of a slimmed-down version of an earlier Milei-backed package.