The IMF Reality Check for Argentina - IMF readjusts their numbers for 2026

[earlyretirement]

My firm has posted for a while the numbers that the IMF were saying were way off for 2026 and inflation would be much higher. This morning they adjusted.

The Fund just raised its annual inflation estimate for Argentina to 30.4% and lowered GDP growth projections to 3.5%. The "V-shaped" dream is meeting the "U-shaped" reality as our firm has posted for a while now.The Inflation Floor:

While 30.4% is a world away from the hyper-volatility of the past, the "sticky" nature of prices in 2026 shows that resetting the economy takes more than just fiscal balance. Service wages and utility adjustments are keeping the floor higher for longer.Growth Recalibration: A 3.5% growth rate is "healthy" for most countries, but for an economy emerging from a deep recession, it’s a cooling signal.

It suggests that the "physical" economy (bricks/agro) can't carry the whole weight if consumption stays suppressed.The Tensions: The IMF highlights "internal tensions." This likely refers to the friction we've seen this month: the PAMI strikes, the Truckers' port blockade, and the Banco Nación "VIP Loans" scandal. Political noise is once again carrying an economic price tag.

The Bottom Line: The 2026 outlook is still positive, but the "margin for error" has vanished.Stability isn't a straight line. The IMF's "caution" is a reminder that Argentina’s return to the world stage is a marathon, not a sprint.

If you look at the IMF numbers from this morning you will see that the IMF is no longer looking at Argentina with rose tinted glasses. They basically doubled the inflation forecast from 16.4% to 30.4%. (This is what our firm has been saying for a while that the numbers were not realistic the government was using).

According to the report and statements from IMF officials released this morning, the adjustment is driven by three main factors:Inflationary Inertia: The IMF noted that while the "shock therapy" of 2024–2025 successfully brought inflation down from near-hyperinflation levels (180%), the "last mile" is proving stickier due to the massive relative price adjustments (utilities, fuel) and service-sector wage collective bargaining agreements.

March 2026 Data: The adjustment comes on the same day the INDEC reported a March inflation rate of 3.4%, bringing the interannual figure to 32.6%. The IMF’s 30.4% projection essentially aligns with this reality, assuming a very gradual cooling for the rest of 2026.

Global Volatility: The IMF cited "geopolitical tensions" and a "slowdown in global demand" as the primary reasons for curbing Argentina’s growth from 4.0% to 3.5%, noting that these factors are hurting export potential.

 

[Wally]

Boy have you been forecasting correctly for a while. I saw you arguing with that Argentine on X who kept insisting that inflation would be lower than last month. I think you said it would be around 3.5% and you were very close. Even the IMF's new numbers look rosy.

The War in Iran is going to complicate things just like you said when the war broke out.

 

[James Bond]

I don't think this was too difficult to see that Milei and Caputo were lying when they said inflation would go down. You can't have inflation going down when your'e raising the price on utilities and healthcare and education and everything else month after month.

 

[earlyretirement]

Boy have you been forecasting correctly for a while. I saw you arguing with that Argentine on X who kept insisting that inflation would be lower than last month. I think you said it would be around 3.5% and you were very close. Even the IMF's new numbers look rosy.

The War in Iran is going to complicate things just like you said when the war broke out.

Thanks Wallly. We painstakingly analyze numbers in Argentina and have for the past 24 years. Yes, I'll have to go back to that Porteño that kept trying to argue with me that inflation would come in lower in March. Some people are in serious denial.

I don't think this was too difficult to see that Milei and Caputo were lying when they said inflation would go down. You can't have inflation going down when your'e raising the price on utilities and healthcare and education and everything else month after month.

Correct. Milei went overboard on all of these utility increases and transportation increases. Too much too soon and people are at a breaking point.

Plus there are many other things on the horizon that we knew were coming. Like the recent case coming out today. I posted about it earlier today. Expect a lot of inflation in food delivery and services like Rappi and PedidosYa. Prices will escalate as they have to treat workers like employees which will drive their costs up.

 

[Betsy Ross]

Thanks Wallly. We painstakingly analyze numbers in Argentina and have for the past 24 years. Yes, I'll have to go back to that Porteño that kept trying to argue with me that inflation would come in lower in March. Some people are in serious denial.


Correct. Milei went overboard on all of these utility increases and transportation increases. Too much too soon and people are at a breaking point.

Plus there are many other things on the horizon that we knew were coming. Like the recent case coming out today. I posted about it earlier today. Expect a lot of inflation in food delivery and services like Rappi and PedidosYa. Prices will escalate as they have to treat workers like employees which will drive their costs up.

Wow I guess they will probably raise fees a lot on Rappi. That is a shame. I use it a lot. Also many were getting hired to do this. With this new law probably they won't want a lot of workers so delivery times will increase and prices will go up.

 

[Betsy Ross]

IMF Reaches Staff-Level Agreement on the Second Review under Argentina's Extended Fund Facility Arrangement

IMF Reaches Staff Level Agreement on the Second Review under Argentina's Extended Fund Facility Arrangement

www.imf.org

 

[jbeas176]

early retirement would please to continue posting on this site. i don’t use X or any other internet platforms

 

[jbeas176]

maybe copt and paste will work. 🤞

 

[lemonade]

early retirement would please to continue posting on this site. i don’t use X or any other internet platforms

But he posted the entire post above. It's all there.

 

[earlyretirement]

early retirement would please to continue posting on this site. i don’t use X or any other internet platforms

Sorry I have been very busy these days. I don't post on this site too much these days. I post daily on X. Almost all of my forecasts have been spot on target. I don't have time to post on both sites. It's well worth an X subscription. I will try to post a few things but mostly post on X.

 

[CraigM]

IMF Reaches Staff-Level Agreement on the Second Review under Argentina's Extended Fund Facility Arrangement

IMF Reaches Staff Level Agreement on the Second Review under Argentina's Extended Fund Facility Arrangement

www.imf.org

Thanks Betsy, that is interesting reading and a very different lens on Argentina

 

[old fart]

My firm has posted for a while the numbers that the IMF were saying were way off for 2026 and inflation would be much higher. This morning they adjusted.

The Fund just raised its annual inflation estimate for Argentina to 30.4% and lowered GDP growth projections to 3.5%. The "V-shaped" dream is meeting the "U-shaped" reality as our firm has posted for a while now.The Inflation Floor:

While 30.4% is a world away from the hyper-volatility of the past, the "sticky" nature of prices in 2026 shows that resetting the economy takes more than just fiscal balance. Service wages and utility adjustments are keeping the floor higher for longer.Growth Recalibration: A 3.5% growth rate is "healthy" for most countries, but for an economy emerging from a deep recession, it’s a cooling signal.

It suggests that the "physical" economy (bricks/agro) can't carry the whole weight if consumption stays suppressed.The Tensions: The IMF highlights "internal tensions." This likely refers to the friction we've seen this month: the PAMI strikes, the Truckers' port blockade, and the Banco Nación "VIP Loans" scandal. Political noise is once again carrying an economic price tag.

The Bottom Line: The 2026 outlook is still positive, but the "margin for error" has vanished.Stability isn't a straight line. The IMF's "caution" is a reminder that Argentina’s return to the world stage is a marathon, not a sprint.

If you look at the IMF numbers from this morning you will see that the IMF is no longer looking at Argentina with rose tinted glasses. They basically doubled the inflation forecast from 16.4% to 30.4%. (This is what our firm has been saying for a while that the numbers were not realistic the government was using).

According to the report and statements from IMF officials released this morning, the adjustment is driven by three main factors:Inflationary Inertia: The IMF noted that while the "shock therapy" of 2024–2025 successfully brought inflation down from near-hyperinflation levels (180%), the "last mile" is proving stickier due to the massive relative price adjustments (utilities, fuel) and service-sector wage collective bargaining agreements.

March 2026 Data: The adjustment comes on the same day the INDEC reported a March inflation rate of 3.4%, bringing the interannual figure to 32.6%. The IMF’s 30.4% projection essentially aligns with this reality, assuming a very gradual cooling for the rest of 2026.

Global Volatility: The IMF cited "geopolitical tensions" and a "slowdown in global demand" as the primary reasons for curbing Argentina’s growth from 4.0% to 3.5%, noting that these factors are hurting export potential.

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Woah. IMF basically said inflation would double in 2026. Boy were the estimates way off! GDP growth sounds totally unrealistic. Everything looks like a recession is coming.

 

[Uncle Wong]

But is the surplus actually real? I just read this and was blown away. I had no idea that they aren't paying their bills to get that surplus.

 

[Finance Prof]

But is the surplus actually real? I just read this and was blown away. I had no idea that they aren't paying their bills to get that surplus.

It is all more or less smoke and mirrors. They are way behind on paying everyone and system is suffering. And inflation is much higher. They are using bogus INDEC basket. If you use the basket that they were supposed to change in February it would be much higher the inflation. The plan is obviously not working and people are tired already.

 

[retiredbanker]

My firm has posted for a while the numbers that the IMF were saying were way off for 2026 and inflation would be much higher. This morning they adjusted.

The Fund just raised its annual inflation estimate for Argentina to 30.4% and lowered GDP growth projections to 3.5%. The "V-shaped" dream is meeting the "U-shaped" reality as our firm has posted for a while now.The Inflation Floor:

While 30.4% is a world away from the hyper-volatility of the past, the "sticky" nature of prices in 2026 shows that resetting the economy takes more than just fiscal balance. Service wages and utility adjustments are keeping the floor higher for longer.Growth Recalibration: A 3.5% growth rate is "healthy" for most countries, but for an economy emerging from a deep recession, it’s a cooling signal.

It suggests that the "physical" economy (bricks/agro) can't carry the whole weight if consumption stays suppressed.The Tensions: The IMF highlights "internal tensions." This likely refers to the friction we've seen this month: the PAMI strikes, the Truckers' port blockade, and the Banco Nación "VIP Loans" scandal. Political noise is once again carrying an economic price tag.

The Bottom Line: The 2026 outlook is still positive, but the "margin for error" has vanished.Stability isn't a straight line. The IMF's "caution" is a reminder that Argentina’s return to the world stage is a marathon, not a sprint.

If you look at the IMF numbers from this morning you will see that the IMF is no longer looking at Argentina with rose tinted glasses. They basically doubled the inflation forecast from 16.4% to 30.4%. (This is what our firm has been saying for a while that the numbers were not realistic the government was using).

According to the report and statements from IMF officials released this morning, the adjustment is driven by three main factors:Inflationary Inertia: The IMF noted that while the "shock therapy" of 2024–2025 successfully brought inflation down from near-hyperinflation levels (180%), the "last mile" is proving stickier due to the massive relative price adjustments (utilities, fuel) and service-sector wage collective bargaining agreements.

March 2026 Data: The adjustment comes on the same day the INDEC reported a March inflation rate of 3.4%, bringing the interannual figure to 32.6%. The IMF’s 30.4% projection essentially aligns with this reality, assuming a very gradual cooling for the rest of 2026.

Global Volatility: The IMF cited "geopolitical tensions" and a "slowdown in global demand" as the primary reasons for curbing Argentina’s growth from 4.0% to 3.5%, noting that these factors are hurting export potential.

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It was a joke for them to say that inflation would be 10% this year! Totally unrealistic. I bet that head of INDEC is so happy he quit. I read it would be 4.5% if they used the new basket they were supposed to use. Things going from bad to worse.

 

[earlyretirement]

It was a joke for them to say that inflation would be 10% this year! Totally unrealistic. I bet that head of INDEC is so happy he quit. I read it would be 4.5% if they used the new basket they were supposed to use. Things going from bad to worse.

Exactly. I have long said that they are over promising and that is never a good idea in Argentina. In no realistic world would inflation ever come in at 10% this year. They had no business even throwing that out there.

Totally right about true inflation being higher with the revised basket. That is why the head of INDEC resigned.

And to make it worse, next month will also be bad because the high inflation this month triggered a chain reaction because several things are based on the inflation.


March's 3.4% inflation print has triggered a massive chain reaction coming for May.

🚌Transportation: Automatic 5.4% hike (CPI + 2%). Minimum CABA fare hits ~$754. (This is more than the March increase which was 4.1%)

💵The Dollar: Official band ceiling is now targeting $1,760, eyeing the $1,800 mark.

Pensions: Minimums rising to ~$393k, but the lag is real.

When every variable—tariffs, exchange rates, and incomes—is indexed to the past, the momentum becomes incredibly hard to break. The "atraso cambiario" debate just got a lot louder.

The CPI (inflation index) has become the central axis organizing prices, tariffs, and incomes in the current economy. The "automatic indexation" mechanisms -while providing some predictability -ensure that the inflationary momentum persists across essential services and the exchange rate.

 

[Avocado]

Exactly. I have long said that they are over promising and that is never a good idea in Argentina. In no realistic world would inflation ever come in at 10% this year. They had no business even throwing that out there.

Totally right about true inflation being higher with the revised basket. That is why the head of INDEC resigned.

And to make it worse, next month will also be bad because the high inflation this month triggered a chain reaction because several things are based on the inflation.


March's 3.4% inflation print has triggered a massive chain reaction coming for May.

🚌Transportation: Automatic 5.4% hike (CPI + 2%). Minimum CABA fare hits ~$754. (This is more than the March increase which was 4.1%)

💵The Dollar: Official band ceiling is now targeting $1,760, eyeing the $1,800 mark.

Pensions: Minimums rising to ~$393k, but the lag is real.

When every variable—tariffs, exchange rates, and incomes—is indexed to the past, the momentum becomes incredibly hard to break. The "atraso cambiario" debate just got a lot louder.

The CPI (inflation index) has become the central axis organizing prices, tariffs, and incomes in the current economy. The "automatic indexation" mechanisms -while providing some predictability -ensure that the inflationary momentum persists across essential services and the exchange rate.

yes this is what people do not understand. It is not just the government says the next 18 months will be amazing and it happen. My granddaughter school went up 13% last month! In one month.

May bus ride fare will go up more than last month! 5.4%! This war will not end soon. Even if it did the damage is done on oil prices. Argentina get almost all fertilizer outside of Argentina. prices will stay high long time.

 

[Betsy Ross]

Thanks Betsy, that is interesting reading and a very different lens on Argentina

Unfortunately I don't think the IMF can even do anything now. They are tied to Argentina whether they like it or not. It is like the saying you owe a bank $1 million it's not problem. You owe them $100 million it's their problem.

I am unsure how they will turn things around with so much debt coming. The mood here is very bad in just a few short months. All my friends are complaining. Many of my local friends can't afford to go out to eat at all when before they did all the time.

yes this is what people do not understand. It is not just the government says the next 18 months will be amazing and it happen. My granddaughter school went up 13% last month! In one month.

May bus ride fare will go up more than last month! 5.4%! This war will not end soon. Even if it did the damage is done on oil prices. Argentina get almost all fertilizer outside of Argentina. prices will stay high long time.

@Avocado this is what everyone I know is complaining about. I can't imagine having kids here. My best friend has 3 daughters and tuition just keeps going up. They are burning through their savings now. She is about to have a nervous breakdown and doesn't know what to do.