Economist Guillermo Hang warned that Argentina's government's main achievement, falling inflation, is showing signs of wear after an AmCham meeting. Hang said consumption recovery has not materialized and there are doubts about economic activity and family incomes. Monthly inflation stopped decelerating eight or nine months ago.
Economist Guillermo Hang voiced concerns after a meeting of the US Chamber of Commerce (AmCham), where a shift in mood was noted among business leaders and officials.
"It feels like a call to rethink Milei's model," Hang stated, pointing to doubts over economic variables such as activity and family incomes. He challenged official optimism: "The current economic situation is not as prosperous as the government promised a few months ago".
Hang described inflation as the "warhorse" of the economic program, but one that is "half tired, half wounded". He noted monthly inflation has been rising for eight or nine months, worsened by factors like rising oil prices, with incomes and pensions falling more than inflation.
The economist highlighted tension between growth and inflation, saying recent measures like lowering bank reserve requirements are insufficient. "If wages remain below inflation, consumption recovery won't happen," he warned, impacting most households while only higher-income ones sustain spending. He also questioned INDEC measurements for understating family consumption adjustments.
