Que viva la PAX KICHNERISTA.

We think that Argentina has entered a moderate inflation regime. We define moderate inflation episodes as those in which inflation is in the low double digits for at least three years in a row. We provide two new alternative measures of underlying inflation pressures in Argentina — one based on VAT revenues and the other calculated by excluding all the items of the CPI that seem to be under control. Both show an acceleration of inflation by late last year, and a growing discrepancy with headline inflation since early 2006.