Argentina Inflation Forecasts Hiked

Economists revised expectations for inflation in Argentina upward while slashing growth forecasts in a monthly central bank poll released on Friday, highlighting the challenges President Mauricio Macri has faced in normalizing the economy, Reuters reported. The poll of 54 participants found median 2018 inflation expectations of 19.9%, up from 19.4% last month and above the government target of 15%. In the prior poll, expectations had jumped from 17.4% after the government loosened its inflation targets in late December. That move, followed by two rate cuts in January, fueled concerns about central bank independence and the government’s commitment to fighting inflation at the potential expense of growth. The central bank held its policy rate steady at 27.25% in each of its two February decisions. Macri has said fighting inflation is a priority as his government seeks to attract private investment and boost growth after more than a decade of populist rule. But his administration’s utilities subsidy cuts, crucial to efforts to lower the fiscal deficit, have contributed to price hikes.