Moody's Sees Inflation Easing in Argentina Amid Economic Reforms

Moody's Investor Services has forecasted Argentina's inflation rate to reach 30% by the end of the year. However, the rating agency indicated the possibility of revising this figure downward in response to improved economic conditions, a senior analyst said during a Tuesday event.

The administration of President Javier Milei, known for its libertarian leanings, has been focusing on controlling runaway inflation, although the rate has shown stagnation in recent months. The recent easing of foreign exchange restrictions and decreasing fuel prices provide the potential for a lowered inflation projection, impacting rates for April and May, according to Jaime Reusche, vice president and senior credit officer in Moody's sovereign risk group.

Reusche commended the government for its prudent measures, particularly the April announcement of lifting currency restrictions. Despite showing progress from 66.9% inflation just months prior, the suggestion of a year-end 30% estimate remains above some analyst expectations. Besides, Reusche mentioned the possibility of a gradual upgrade in Argentina's sovereign credit rating, noting Moody's 4% economic growth projection for 2025, slightly below market expectations.

(With inputs from agencies.)