It should be noted that the IMF does not include inflation forecasts for Argentina, because it is considered that the forecasts are subject to ongoing negotiations, which is why for the purposes of comparison, the latest data from the Market Expectations Survey was used. (REM) carried out by the Central Bank among the main consulting firms and which shows a projection of 48.4% for the current year.
This percentage is only surpassed by Venezuela 2,700% -, Sudan -115.5% – and Suriname 48.6% and it is not far from Yemen 45% – and Zimbabwe 41% -.
Excluding Venezuela, average inflation in the Latin American and Caribbean area –9.7% – would represent less than a quarter of the rise that Argentina would register in the current year.
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Scare
What “scares” the IMF technicians is that annual inflation in advanced economies is forecast to reach a maximum of 3.6% on average in the last months of this year, thus breaking three decades of low rates.
The good news is that the projections of the multilateral organization are that in developed nations inflation will return to a rate of 2% in the first half of 2022, that is, a level in line with the objectives of the central banks.
For emerging markets, a faster increase is expected, reaching an average annual inflation of 6.8%, and then decreasing to 4%.
The projections, however, come with “considerable uncertainty,” according to the Fund, and warn that inflation may be elevated for longer.
Factors that could play in this regard include:
- rising housing costs,
- the lack of supply,
- the rise in food prices and
- currency depreciations in emerging markets.
It is noted that food prices worldwide increased by around 40% during the pandemic.
Contrary to the slowdown in inflation that the IMF is betting on, the rise in prices in Argentina would remain at high levels, at least according to the forecast of the consultants for 2022: 46.2% and – if it is fulfilled – It will foreseeably achieve a new position at the top of the table of the countries with the most instability.
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