With inflation at 100% over the past twelve months, far from improving, banks and advisory firms believe so this year the price increase could be “much higher” registered in 2022. This is demonstrated by the latest report by FocusEconomics Consensus Forecast – LatinFocus, which collects the opinions of 45 consultants and financial subjects.
On the FX front, analysts have warned that “the peso will continue depreciation this year due to prolonged monetary financing of the fiscal deficit.
Therefore, analysts expect that by December of this year the official dollar ends at $347.5 and that in the parallel market the US currency reaches 646.4 dollars, a gap of 86%. Today those values are at $202.94 and $379, respectively.
The report, which sees a slight fall In his projections for the Latin American economy in 2023, he emphasized the “worsening outlook” for Argentina during this year. “Inflation rose further in January, while consumer confidence remained deeply pessimistic and the peso continued to weaken in January and February,” the paper noted.
At the same time, the report added: “A historic droughtadded to the frosts, it is affecting soybean and corn crops, which has led the government to start talks with the IMF to soften reserve targets currency for this year. Also, due to cases of bird flu, the government suspended bird exports at the end of February.”
All this is the prelude to the explanation a “contraction” of the economy for this year.“Inflation and extremely high interest rates, together with declining savings, will affect domestic demand, as well as a unfavorable business environment ahead of the general election in October. A significant debt, the repayment risks and pre-election political uncertainty carry downside risks.”
This complicated scenario has led those consulted to raise their inflation projections compared to what they had anticipated a month ago.
“Our speakers design an average inflation of 98.7% in 2023, which is 1.9 percentage points higher than last month’s estimate, and 91.2% in 2024”, remarks the study, which notes how “the volatility of energy prices and the tax generosity before the election october i am a risk factor trace”.
The most negative forecasts come from the banks: Supervielle forecasts a 3% drop in GDP this year, while Galicia forecasts a 2.8% drop in the economy. The only consultancy that matches these projections is Eco Go, which sees a 3% contraction in business.
Charles Arterburn is a seasoned business journalist for News Rebeat, where he provides comprehensive coverage of the latest trends and developments in the world of finance and economics.