The inflation of 25.5% in December it pressures the price of the official dollar beyond the devaluation held in December. In that scenario, a survey carried out among more than 40 economists from national banks and consulting firms and foreigners with their expectations for the coming months.
This is the survey carried out by FocusEconomics which publishes its projections regarding the value of the dollar, the levels of inflation and activity expected until the end of December.
Dollar: what to expect for the first year of government
The document maintains that the planned devaluation of the wholesale exchange rate for 2024 will be around 110%, a level below the projected inflation of 280%.
In particular, the Expert consensus considers that the official exchange rate will end the year at $1,700.
Consulting firms that predict a lowest dollar They are: Perezco Economics ($943.7), Torino Capital ($1,030), Analytica Consultora ($1,030), Fitch Solutions ($1,193) and Barclayss Capital ($1,193).
Meanwhile, those who predict a higher dollar are: Equilibra ($3,070), LCG ($2,902), Banco Supervielle ($2,490), Santander ($2,393) and Fitch Ratings ($2,375).
Economists’ forecasts for the end of the year published by FocusEconomics they go in line with el Market Expectations Survey (REM) carried out by the Central Bank, where a wholesale dollar of $1,700 is also expected by the end of the year.
The LatinFocus report noted that “there is great uncertainty around the prospects for the peso, such as greater convergence between the official and parallel markets. The rate cannot be ruled out. That said, further depreciation seems inevitable this year: our panelists’ forecasts for the end of 2024 range from $935 to $3,070 per dollar. Much depends on the success of President (Javier) Milei’s reform agenda: if the new Government’s attempts to quickly revive the economy, drastically reduce the fiscal deficit and slow money issuance prove successful, demand for the peso will strengthen and currency should stabilize.”
Growth: they expect a 2% drop for the entire year
Focus Economics expressed that the fall in GDP “is likely to accelerate, hit by the hyperinflation, collapse of the peso and the very high rates and interest.”
“Possibly the measures will translate into an increase in inflation in the short term due to the devaluation of the currency and cuts in subsidies,” the document added. And he warned that the “shock therapy of the Milei Government will result in a significant drop in economic activity in the first quarter of 2024”
“GDP is expected to contract this year, affected by the Fiscal consolidation and rising inflation amid the devaluation of the peso and the elimination of price controls. That said, activity should return to growth in 2025 as Milei’s reform program bears fruit. The downside risks are posed by parliamentary and popular opposition to these reforms,” summarizes the FocusEconomics report.
In that sense, it is expected that the GDP falls 2% in 2024 and should grow 3% in 2025.
Inflation will be higher than in 2023
The inflation rose 211.4% in December, the highest figure in Latin America. In 2024, analysts expect inflation to continue rising “due to the elimination of price controls and the reduction of the gap between official and parallel exchange rates.”
Specifically, they predict that prices rise to 280% in 2024, which represents an increase of 57.7p.p compared to the end of last year.
Among those consulted, the highest CPI was the one projected by the consulting firm Balance, with 568%followed by Alphacast (456%), Analytica Consultora (438.8%), LCG (431%) and Banco Supervielle (404%).
Source: Ambito
