How far will the dollar and inflation reach in 2023 and 2024, according to the projections of banks and investment funds?

Month after month about 50 consultants, who closely follow Argentina’s numbers, give their projections on the economy’s variables – GDP, inflation, exchange rate – and this year they continue to show a month-by-month deterioration, according to forecasts compiled periodically by FocusEconomics’ LatinFocus Consensus Forecast report. How far will the dollar, inflation and economic growth reach in 2023 and 2024, What do the experts predict for the last month of the year?

“Growth will almost stop next year. Domestic demand will be hit by inflation and very high interest rates, declining savings and an uncertain economic environment ahead of the general elections in October 2023″, specifies the document presented this month. It adds: “Besides this , an economically weaker world will limit export growthand high debt levels also cloud the outlook.”

Inflation projections for next year are: from 54% to 135%. In which the most benign forecasts for 2023 were: MAPFRE Economics (54.2%), JPMorgan (57.2%) and Credit Suisse (60.1%).

Instead, EcoGo predicts the highest inflation rate: 135.1%, about 5 percentage points higher than the previous month’s estimate of 130%. Among the highest also the projections of Empiria Consultores 125.6%, and in C&T Asesores, 125.4%.

Dollar

“The Central Bank adheres to a floating exchange rate managed by the peso“, says the report. And explains that “the peso is expected to depreciate further next year, weighed down by the continued printing of money and high inflation”.

“Our panel sees the peso ending in 2023, at $338.3 and at $562.3 in 2024, respectively,” they point out.

Inflation

“This month, adjusted upwards, average inflation will be higher in 2023 than this year on average, fueled by falling pesos and monetary financing of the fiscal deficit. More volatile and aggressive energy prices and monetary tightening will be key factors to consider,” the paper said.

Predict those consulted by Latin FocusEconomics inflation of 95.5% by the end of 2023, which represents a 5 percentage point increase from last month’s forecast. Towards the end of 2024, inflation is expected to reach 70.3%.

On the other hand, in the LatinFocus Consensus Forecast, they see the LELIQ rate would end 2023 at 76.27% and they would end 2024 at 62.21%.

NS