The BBVA bank started the document with a diagnosis: “The recovery of economic activity and the good financial environment, in a framework of fiscal balance and monetary discipline, show that the worst of the crisis is over.”
In addition, the 2024 Real Estate and Construction Situation report was published, where experts affirm that the repeal of the Rental Law, the resurgence of credit, greater control of inflation and real wages in recovery predict a greater expansion of the real estate market.
The fiscal balance will close this year in balance, according to BBVA, ending 15 consecutive years of deficit. This was achieved thanks to a drastic reduction in spending, which made it possible to achieve a primary fiscal result of 1.7%despite the drop in public revenues due to the economic contraction. BBVA Research anticipates that the Argentine Treasury will maintain the commitment to a balanced total fiscal balance by 2025.
The maintenance of ‘crawling peg’ in a monthly adjustment of 2% contributed to the disinflation process, although this slowed down the accumulation of reserves in the Central Bank (BCRA). BBVA economists predict, according to the report, a progressive liberalization of exchange restrictions during 2025.
Inflation and projections for 2024 and 2025
For December of this year, annual inflation of 120%the result of exchange rate control policies and strict monetary management. The regularization of relative prices is also observed as part of this process. As for December 2025, projections point to inflation close to 35%with a risk margin tilted towards even lower values.
Economic recovery and future prospects
After hitting its lowest point during the second quarter of 2024, economic activity saw better-than-expected results in the third quarter, along with a slight recovery in real wagesaccording to the report. Thus, the Gross Domestic Product (GDP) is expected to fall by 3.8% in 2024, but a robust recovery is projected with growth in 5.5% in 2025, driven mainly by consumption and investment.
Social trust and external factors
The outlook for 2025 also includes strengthening the social trust in the national Government, providing a solid foundation to address challenges such as sustainable fiscal balance and exchange rate flexibility.
Finally, the Argentine Government could benefit from the positive relationship between the American president donald trump and the country, which would offer possible economic and political advantages thanks to a favorable bilateral relationship between both leaders.
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Source: Ambito
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