April 14, 2016 / 7:44 PM / 2 years ago

UPDATE 1-Curbing inflation is top priority for Argentina -finance minister

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By Daniel Bases and Jason Lange

WASHINGTON, April 14 (Reuters) - Argentina’s government is targeting an inflation rate no higher than 25 percent this year and is making the battle against rising prices its top priority, Finance Minister Alfonso Prat-Gay said on Thursday.

Prat-Gay, speaking at an event on the sidelines of the IMF and World Bank spring meetings in Washington, said the country’s new right-of-center government is aiming for inflation to be between 20 and 25 percent.

“We’ve got a target and we’ve been clear about that target. And that target is a ceiling of 25 percent for this year. And it is a band of 20 to 25 percent,” Prat-Gay said during an appearance at the Atlantic Council think tank in Washington.

“The question is what is the inflation measure we should look at? There is no official national measure and there won’t be an official CPI index at least until next year,” he said.

Prat-Gay said Argentina’s double-digit inflation rate should start showing signs of easing in the second half of the year, though he added that it would take time for it to come down to a more manageable level.

Private economists expect consumer prices will rise 35 percent this year, but Prat-Gay said the country’s new right-of-center government hoped to reduce inflation to 17 percent in 2017.

Reigning in inflation is the top priority for the government after the initial “tidying up” of other issues such as the recently negotiated deal to settle a long-festering sovereign debt dispute with U.S. holdout creditors, he said.

Argentina’s government plans to sell up to $15 billion in debt next week, using the proceeds to pay off 90 percent of the holdouts who recently settled their claims.

Prat-Gay said he was not concerned that the remaining holdouts would impact the debt sale.

Holdouts have tied up Argentina in U.S. courts since the Latin American nation defaulted in early 2002 on nearly $100 billion in sovereign debt.

Argentina’s new government is desperate to convince financial markets that its low debt burden and economic reforms make it a good place for investors. It is particularly keen for investment to fund its backlog of infrastructure projects. (Reporting by Jason Lange and Daniel Bases; Editing by Paul Simao)

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