Analysts place the interest rate at an average of 92.5% in July. On the other hand, they consider that the official dollar will reach 407.55 Argentine pesos in December 2023.
The Central Bank of the Argentine Republic (BCRA) has published the data from the Survey of Market Expectations (REM). It is a systematic follow-up of the main short and medium-term macroeconomic forecasts. One of the strongest points in the report is the inflation data forecast for the current year: 142.4%.
The study was carried out between June 28 and 30, 2023. For its conclusions, forecasts of 39 participants have been considered, including 26 consulting firms and research centers from Argentina and abroad. Thirteen financial entities also collaborated. The monetary authority has remarked that the forecasts made in the report do not constitute projections of the BCRA.
Main Data Published in the Report
The work published by the BCRA has made a detailed analysis of the expectations of retail prices, the interest rate, the nominal exchange rate, exports and imports, the primary result of the non-financial national public sector, unemployment and economic activity. economic.
The projection regarding monthly inflation for June was stipulated at 7.3%. To all this, the specialists who participated in the work located inflation of 142.4% for the whole year. On the other hand, they revised the forecasts for 2024 and 2025, placing inflation at 105.0% and 54.8%, respectively.
The annual data, if confirmed in reality, would give a strong jump compared to the past period. Let us remember that during 2022, inflation in Argentina failed to reach triple digits. When providing details, the specialists have expressed the following in the report:
“Short-term estimates —revealed between June 28 and 30— suggest inflation of 7.6% for Jul-23. The variations expected for the following months imply stable monthly inflation (average of 7.9% per month) and slightly increasing until Dec-23.”
Regarding the projections for the next twelve months, the REM revealed that the expectation is that the CPI will be 161.4%. However, experts anticipate that in 2024 the price rate increases will slow down, leading the CPI to a total variation of 105% in the year. These expectations may well differ from reality.
Interest Rate and Exchange Rate, According to the REM Report
Analysts place the interest rate at an average of 92.5% in July. In addition, they envision a rise to 93% for the coming months, which implies reductions of 1.50 and 2 points in relation to what was projected last month, respectively. On the other hand, specialists maintain that by the end of 2023 the Badlar interest rate could reach 96.98%, although in 2024 it would drop to 75.8%.
The REM also considers what the market’s expectations are in relation to the evolution of the official nominal exchange rate. Taking into account the current rate of devaluation and the gap that exists with the dollar in its different versions, specialists believe that the dollar will reach 407.55 Argentine pesos in December of this year.
Although there are no stipulations regarding the blue dollar, that parallel currency sets the pulse of the economy, and today it stands at 492 pesos.
By Audy Castaneda
