Definition
Private M2 measures the amount of money held by the private sector, including currency in circulation and peso-denominated demand and savings deposits. Its year-on-year variation reflects the pace of liquidity expansion or contraction in the economy.
Analysis
Starting in 2018, expansion rates begin to moderate amid exchange rate tensions and macroeconomic adjustment. However, from 2019 onward, private M2 growth accelerates again, anticipating a regime of higher inflation and increased monetization of fiscal imbalances.
In 2020, a very sharp surge in private M2 occurs, with year-on-year growth rates comfortably exceeding 80–100%. This behavior is linked to pandemic response policies, increased monetary issuance to finance the Treasury and support programs, within a context of capital controls and a heightened preference for peso liquidity.
Between 2021 and 2023, private M2 remains at very high growth levels, with renewed accelerations accompanying a process of chronically high inflation and a decline in money demand. Monetary expansion becomes a central driver of inflation dynamics.
Starting in 2024, year-on-year rates reach extraordinary levels, reflecting both price corrections and the formalization of nominal balances, as well as the inertia of a high-inflation regime. In 2025, a gradual deceleration in private M2 growth is observed, consistent with an attempt at monetary and fiscal stabilization. Nevertheless, growth rates remain very high by international standards, indicating that the normalization process is still ongoing.