In the global framework, the war in Ukraine, prospects for an aggressive tightening of monetary policy by the US Federal Reserve and lower global economic growth are in the sights of investors.
“The inflationary floor in the current situation would be above 4% month-on-month, compared to 3% last year, which means that it is very difficult for us to be below 73% year-on-year by the end of the year,” said the consulting firm Delphos Investment. “We have increased our inflation projections to 75% by the end of 2022, given the anticipated increases in regulated prices,” she added.
“The Unfortunately, the fight against inflation should include a transitory stage of limiting consumption in order to temper it, while the fiscal accounts are being balanced; but the political situation would not be favorable to implement it,” said Roberto Drimer of VatNet Research.
“There is a very strong concern fundamentally about the deterioration of the purchasing power of real income and that this is what has a very negative impact on the perceptions that citizens have about government management,” Marina Acosta, of Analogies consultancy.
“The main concern that we detect in the reports is inflation. At the same time, there is also the concern about the deterioration of the purchasing power of wages. That is what causes a picture of great social sorrow and that is also a bad mood translates into a lot of social demand towards the government,” he said.
“In full high season of foreign exchange liquidation, the BCRA has little and nothing lefta. Compared to last year, you are buying less than half. And looking forward, it should buy around 75 million dollars per wheel to accumulate 2.8 billion in the quarter and meet the goal with the IMF in June,” said Roberto Geretto, from Fundcorp.
If the current dynamics continue, when the high season of foreign exchange liquidation passes, it is very likely that we expect a higher stocks and a dollar traveling somewhat faster than the current 4% per month,” he estimated.
“There is a severe challenge for the Argentine economy, since correcting relative price distortions, an essential step for any future stabilization plan, implies going much further than addressing the dollar/peso relationship,” Fundación Mediterránea said.
“The policy of subsidies and tariffs for public services is becoming increasingly relevant, as well as the operation of foreign trade, which today is highly affected by the application of a large number of restrictions, both in import/export operations and in the availability currency,” he added.
“The problem we have today is that there is no anchor. The anchors that can contain this inflationary acceleration have disappeared, which in these months has been very impressive,” Ricardo Delgado, of the Analytica consultancy, said in radio statements.
“There are no objective reasons to have hyperinflation in this context. We are in an agreement with the Fund and this may be the argument that supports the possibility of avoiding a hyperinflationary outbreak or some exchange rate event that greatly accelerates the rate of inflation in the coming months,” he added.
“The agreement with the IMF is already violated. The agreement had three fundamental axes: a fiscal goal, a monetary issue goal and a reserve accumulation goal. The most worrying thing is that we have had the best foreign exchange liquidation, 14% more than in the same period as last year, and the Central Bank with just a few gadgets was able to increase reserves,” Martin Redrado, former BCRA president, estimated in radio statements.
Source: Ambito
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