The Inflation slowed in September to 3.5% reaching its lowest rate since November 2021 in the midst of ambitious money laundering that attracts foreign currency to the market, while at the political level the ruling party achieved endorsement in Congress for a presidential veto of a law that guaranteed financing for public universities.
He The International Monetary Fund (IMF) approved measures on Friday that will reduce borrowing costs of its members, a situation that will allow Argentina save more than US$3,000 million.
Inflation: what economic analysts expect for this month
“September showed a slowdown in inflation (…) becoming the lowest monthly variation since October 2021. Looking ahead, We expect the observed trend to persist.with regulated prices and services leading the increases, while the prices of goods continue to grow at a more moderate pace,” said the consulting firm ACM.
“There are reasons to believe that the decline in inflation will not be replicable in the coming months, or at least not of the same magnitude. The fact that we have not yet converged to the crawling-peg (controlled peso valuation) is due, in part, to the monetary expansion that has prevailed for a few months,” noted a GMA report. ““We believe that inflation could close 2024 in the area of 120-125%”estimated the SBS Group.
Calm dollar and “financial summer”: for how long?
“There is a financial summer, the financial situation is calmer and the Government celebrates it,” Guillermo Hang, former director of the central bank, said in radio statements.
“The productive issue is quite complicated, the economy is functioning at different speeds, the financial part is happy and the sectors that generate more employment are quite resentful. The great success of the Government is having reduced inflation in a rather weak scheme. This strategy He will maintain it until the elections,” he estimated.
“The abundance of dollars has calmed spirits and improved the prices of local assets, although its cause has a temporary duration such as money laundering,” said VatNet Financial Research.
“It is a phenomenon of social psychology, a few weeks ago it seemed that a deluge of complications was coming; but now optimism spread as if the underlying problems of the economy had already been solved“he added.
“Laundering would not only be allowing the reserves to oxygenate and leaving the BCRA with a purchasing balance, but also contributing to the decline in financial dollars – with a gap already at 20% – and to economic reactivation,” said economist Gustavo Ber.
“To the extent that the Government continues to achieve fiscal surplus in public accounts, a constant purchase of dollars in the market, increase in reserves and substantial reduction in country risk, dollars will converge on a common price, and the discussion of the ‘stock’ will move to another level, since with or without ‘stock’ dollars will be able to migrate from Argentina at a price similar to that of exports”, said analyst Salvador Di Stéfano.
“There is an exchange delay and it is slight. It is not big enough for the Government to make a major change of course. It is better to lift the exchange rate as soon as possible. For now it helps, but it slows down economic activity,” economist Fausto Spotorno said in radio statements.
Source: Ambito
