They expect 2023 inflation to be similar to this year’s and even close to 100%

Until a month ago, consultants estimated that inflation would close this year at around 90% and predicted that in 2023 the price increase would be around 76%, according to the latest data from the Market Expectations (REM) survey. made by the Central bank.

But in recent weeks the dynamics of price increases has accelerated and there are already several economists who they see inflation next year at par or even above estimates for this year.

The reasons for this jump are related to the inertia that bring the prices, the tariff update which will hit precisely in 2023, together with the electoral scenario that will lead the government to increase the monetary issue to meet higher expenses, plus the delay in the correction of the exchange rate, which when it occurs will have its translation in the price index.

Like this, FIEL expects a 112% jump for this year and 117% for the next, while JP Morgan reaches 101.2% for 2023.

In the first seven months of the year, inflation accumulates 46%. In July, the latest official data, the rate was 7.4%, the highest for a month since April 2002.

For this month, inflation is expected to hover around 6.5% and in the future, analysts believe it will fall below 5% per month. “It is coming down very slowly“, keep those who follow the price dynamics day by day.

For 2023, those who see inflation around 100% or lower is why They estimate that the government will initiate a “controlled division of the exchange rate” which gives greater competitiveness to exports and increases the cost of foreign exchange for other sectors. But if this scenario turns into a devaluation jump, the forecasts rise above 100%.

From the Aurum consulting firm, Pablo Repetto predicts 99.2% of inflation for this year e 98.1% by 2023, “provided there is no discreet jump in the exchange rate”.

The reasons why Repetto sees next year’s index on par with this year’s are related to “tariff adjustments that will be pending and also pressure on pesos debt which will be very difficult to roll over, which can provide free dollar increases. Furthermore, we do not see a fiscal adjustment in the election year as the main scenario and to this we add that the monetary issue will continue.

“2023 is very complicated“, Repetto says and points out that the economy will go from an expansion of 3.6% this year to 1.7% in 2023.

From FMyA, Fernando Marull expects a 91% increase in the consumer price index this year and 90% for the next.

“Inflation has high inertia, so far without much fiscal adjustment, and there is still a lack of exchange rate measures that will affect inflation, should an exchange rate split be applied,” adds Marull. But he warns it “If there is a devaluation shock, next year inflation is 130%, minimum”.

Lorenzo Sigaut Gravina, director of Equilibra, sees “almost 100%” inflation for this year. “2023 is still very uncertain, but we see it with high inflation and GDP will start with a negative statistical drag. As the inflationary process has a lot of inertia this year’s number (95% -100%) is likely to repeat itself. It can also be a little less or a little more if the situation gets worse. “

More inflation, less income

“The outlook for the latter part of this year will be colored by a greater impact of the inflationary acceleration on income (mainly self-employed, informal workers and sectors most dependent on transfers from the state), an adjustment of the tariffs of public services that will subtract disposable income, an increase in the cost of consumer credit and investments due to the adjustment of tariffs and a tax reduction impulse due to the need to accelerate fiscal consolidation “, says Santiago Manoukian, of Ecolatina.

For this year Ecolatina expects a minimum inflation of 90%. “In the context of strong inertia, pending tariff adjustments, a consolidated crawling peg at levels of 5% per month and the reopening of joint ventures, in the face of the lack of a solid anchor to stabilize expectations, ahead of 2023 we expect inflation in the area of ​​73% “.

For 2022 Ecolatina expects growth of 3.8% in the annual average and for the next year the consultant’s estimate is about 1% of the expansion of gross product.

AQ