Economists believe it will be impossible to reach the official 60% inflation target

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The government has accomplished the dismal feat of preventing inflation from ending in 2022 in three digits. However, after the 94.8% reported by INDEC this Thursday, economic analysts warn that reaching the 60% target. for this year proposed by Sergio Massa in the budget will be not only an “ambitious” task, but also “unreachable”.

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Inflation over the past twelve months almost doubled, to go from 50.9% in December 2021 to nearly 95% by the end of 2022. Annualized, month-by-month last yearinflation was on the riseto close last month at its highest level in 32 years.

In the government they insist that a new path of deceleration in the rise in prices, even if the figure of 5.1% in December shows a slight overheating compared to what was seen in the previous month. Although the monthly measurement follows the fourth month with a better result than expected, analysts of the municipality They don’t believe in this government’s ability to “tame” inflation this year.

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The data reported this Thursday is lower than the 5.5% expected in the latest report on market expectations released by the Central Bank last Friday. Market analysts who responded to the official survey predicted the CPI this year to close up 98.4%, well above official expectations.

Andrés Borenstein, da EcoviewsHe said: “It is true that the first quarter looks like inflation is coming better than expected. But I think there are monetary factors and expectations that will accelerate it further in the second half. And in the last quarter with the elections even more”.

In this context, the economist’s perspective is that in 12 months, INDEC will announce inflation of 110%, above market consensus. Something similar happens in counseling Analyticalwhere they predict that inflation in 2023 will at least replicate that accumulated in 2022.

Claudio Caprarulo, director of the consulting firm, said that although the numbers for the first months of the year may be more encouraging, it will not be possible to move towards a significant reduction in the inflationary path.

“The slowdown has a macroeconomic component linked to fragile stability that the government obtained, particularly in the dollar price and the peso debt market. In turn, it is also driven by negative factors such as the crisis the livestock sector is experiencing due to drought and its impact on the price of meat,” he said, adding: “The 60% target is very ambitious and to Analytica today we don’t see how that can be achieved.”

For Lorenzo Sigaut Gravina, from equilibriumthe factor of Drought it’s the key. “The good news is that in the last two months of the year, inflation has remained around 5%, which annualized would be 80%. We think it is unlikely that inflation will fall below that 5% in the first quarter, although it is possible that from April to July, before PASO, the government manages to align factors so that they are quiet months,” he said.

However, he specified: “Apart from the government managing to align expectations around parities to be more moderate, maintaining the exchange rate and exchange rate anchors, the impact of the drought can overheat prices. Drought not only means fewer exports, but it can also represent food shortages in some sectors, which affects prices again.

The economist warned that although access to the official dollar for companies that are part of the Fair Prices program serves as a stimulus to avoid the remark, if the faucet for the rest of the importers remains closed, it could represent a new path for the increase in prices of those goods which are not reached by the official initiative.

Source: Clarin

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