Strong leap in annual inflation forecasts: in one month they went from 65 to 72.7%

The Central Bank’s latest Survey of Market Expectations (REM) reflects the dramatic shift in expectations affecting inflation: from one month to the next they went from 65% to 72.5%.

The inflationary spiral extends to 2023: now they expect 60% per year, when until a month ago they expected 50.5%. And for 2024 the estimate reaches 47.8%.

The rise in REM projections coincides with several consulting firms that in recent weeks have begun to warn that inflation could close this year close to 80%.

For May, the REM estimates a consumer price index (CPI) of 5.2%. As of April, analysts composing this poll were forecasting 5.6%, and the INDEC record for that month was 6%.

They also anticipate inflation of 5% for June and 4.5% for July. And in the following three months they see it at 4%. Just in November, economists see the index below 4%, at 3.8%.

Parallel to the upward correction in inflation, private advisors have reduced the forecasts for growth in economic activity. EMN participants expect real gross domestic product (GDP) to expand by 2022 by 3.3%. In this case the projection was reduced by 0.2 percentage points compared to the previous REM.

Economists also predict an increase in interest rates. For June 2022, those participating in the REM estimate a BADLAR rate for private banks of 47.05%, 153 basis points more than the average rate recorded in May (45.52%).

As for the dollar, they expect the exchange rate to catch up $ 157.9 per dollar in December 2022.

Analysts also estimate that exports will be higher than expected. Those participating in the REM estimate an amount for 2022 of 86,404 million dollarsUS $ 1,840 million more than the last REM projection.

Meanwhile, the value of imports in 2022 would be a 75 billion dollarsthis is $ 2,962 million more than the previous survey forecasts.

As for the unemployment projection, for the first quarter of 2022 the median of the unemployment rate forecasts remained at 7.5% of the Economically Active Population (PEA).

Meanwhile, for the second quarter of 2022 it goes to 7.9%, and for the third quarter of 2022 to 7.8%. Furthermore, unemployment is estimated at 7.6% for the fourth quarter of 2022.

Finally, the projection of the nominal primary budget deficit of the National Non-Financial Public Sector (SPNF) has increased compared to the previous survey and is estimated at $ 2.192 billion. A deficit of $ 2.6 trillion by 2023even higher than the previous measure.

AQ