Argentina: Martin Redrado asks for patience
Argentina’s central bank president reckons that it will take at least another two or three years before his country’s economic variables normalize. Martin Redrado says that although Argentina has made progress since the 2001/02 financial crisis, more patience is needed before it can achieve sustainable growth.
|Martin Redrado: inflation fears laid to rest|
“This is an economy still in transition,” Redrado tells Euromoney in an interview in London. “Things are not normal yet and that will take time. There needs to be patience.”
One economic variable that is a cause for concern is inflation, with the rate in double digits. But Redrado says that according to a central bank poll of financial institutions, inflation expectations have come down from 13% at the beginning of the year to 11.5%. He expects the rate to be within the 8% to 11% target range at the end of the year.
One thing that will help Argentina meet its inflation target is a slowing growth rate. The economy grew 8.6% in the first quarter but Redrado forecasts that growth will fall to 5.5% to 6% in the fourth quarter. “Argentina can’t sustain a 8% to 9% level of growth,” he says.
As for the financial system, the central banker says that Argentina’s banks are back in the black, with the average return on assets at 1.2%.