Luis Caputo affirmed that the Government sees signs of recovery in various sectors and a recomposition of income and retirements.

Inflation in May will be below 5% in Argentina, Economy Minister Luis Caputo said Sunday night, adding that the Government sees signs of recovery in several sectors and a recomposition of income and pensions.

"We believe that May inflation will be below 5% (...) Lower inflation is essential for recovery," Caputo said in an interview recorded with the local television channel La Nación+ .

The Economy Minister's forecast was in line with a recent survey of analysts consulted by the central bank, who projected inflation of 5.2% in May and 5.5% for June.

Inflation shows a continuous decline in Argentina since the inauguration in December of the Government of ultra-liberal President Javier Milei, who has relentlessly cut expenses, causing a strong adjustment of the economy.

Caputo said that signs of recovery were seen in May and that the Government needs the approval of the so-called base law and the fiscal package, with which it seeks to deregulate the economy and attract investments, which will be debated in the Senate on Wednesday.

The ruling party La Libertad Avanza has been facing difficulties in passing the law in Congress because it has a minority in both chambers.

"There are signs of recovery in May in several sectors. Income and retirements are also being restored. In May the economy turned around," Caputo said. "The basic law, which includes the labor reform, the tax chapter and labor money laundering, is precisely to speed up the recovery in the labor market," he added.

The minister attributed the recent rise in country risk to political turbulence and directly accused a sector of the opposition of wanting to overthrow the Government.

"The country risk, until this unbridled political attack, was at 1,200 points. And, if the law passed, we would already be at 1,000," Caputo said. "Part of the opposition has only one objective, which is to overthrow this Government. For a good sector of politics, luckily not for all, politics is a business," he added.

When asked about the exchange restrictions, popularly known as stocks, the minister said that in order to lift them, four conditions must be met.

"We did not set a date to lift the trap. What we set is a strategy to get out of the trap," he said.

"Essentially four conditions must be met. One is fiscal balance. Two, having solved the problem of inherited stock, having solved the flow and, finally, that there is a reasonable relationship between reserves and remunerated liabilities," he added.

The Government hopes that economic activity will be reactivated in the second half of the year after reducing inflation, but extreme austerity measures have generated a recession and pushed more than half of the population into poverty.