It is expected an increase in the Broad Consumer Price Index of 6.7% for this year, below the estimate four weeks ago (it was 7.15%). In this deflationary scenario, the president Jair Bolsonaro He said he thinks the interest rates they will start to go down. Although, he clarified, this is the power of the Central Bank.
And precisely, analysts consider that the Selic rate will continue at 13.75% in the coming months and that it will begin to drop only in 2023. This is key for the economic activityanother figure that showed signs of improvement according to the analysts surveyed in the last Focus.
The estimated GDP growth for this year also showed a slight improvement, going from 2% to 2.1%. In addition, the dollar is expected to trade at 5.2 reais by the end of 2022, slightly above the current price.
This context of a stable real and a moderate expansion in the economy are still (somewhat) encouraging news for Argentina. In fact, It is estimated that for each point of GDP that the neighboring country, the main trading partner, grows, the Argentine economy benefits from 0.3% growth. Greater growth in Brazil, therefore, has a direct impact on exports -especially industrial ones- from Argentina.
Balance of trade
Greater growth in Brazil could help reverse, for example, the red in the bilateral trade balance. In fact, in July the balance was deficit for Argentina in US$370 millionwhich meant the largest red since June 2018.
“This result was the product of imports that once again grew above exports (39.1% yoy vs. 12.1% yoy), something that was evident in all the months of the year with the exception of May,” they explained in this regard. from Abeceb.
“In this way, the accumulated bilateral trade deficit until July was US$1,719 million, which meant a notable deterioration in relation to the balance of the same period last year (-US$484 million). Said balance was the consequence of imports that increased twice as much as exports (34.2% yoy vs. 16.8% yoy) so far this year”, they added.
According to the last report of the consultancy, in any case, the projections in this area are not too encouraging: “Going forward, we expect a deepening of the bilateral trade deficit -which would close the year at around US$3,000 million-given that imports will continue to grow above exports”.
“It is important to note that the projected deficit would be even higher were it not for the growing restrictions on imports. Although the BCRA improved access to the MULC for the payment of automotive imports in July, greater obstacles are not ruled out given the difficulty that the monetary authority is having in accumulating reserves,” they concluded.
Source: Ambito
David William is a talented author who has made a name for himself in the world of writing. He is a professional author who writes on a wide range of topics, from general interest to opinion news. David is currently working as a writer at 24 hours worlds where he brings his unique perspective and in-depth research to his articles, making them both informative and engaging.
