The consulting firm FocusEconomics issued a new report with the survey of various economists, who gave their forecasts for the dollar, inflation and GDP in Argentina for 2024. His projections worsened compared to the previous survey.
According to the consulting firm, the country has been showing a contraction in GDP for months and an alarming stagnation in activity due to “hyperinflation, the collapse of the peso and high interest rates.” And he highlights as a “hard blow” the defeat of the Government with the omnibus law in Congress.
“The economy will contract at a faster pace this year than last, hit by sustained fiscal adjustment and skyrocketing inflation amid the devaluation of the peso and elimination of price controls,” the analysts indicate.
Regarding economic activity, the report highlights that “in October-November it stagnated. Meanwhile, industrial production declined more sharply and exports plummeted. Moving into the first quarter (of 2024), a depreciated peso and a feeling of depression among consumers point to declining activity.”
However, the document states that “Growth should return in 2025 as the results of President Javier Milei’s reforms are seen.”
What will happen to the dollar in Argentina?
Consultants see that by the end of 2024, The official dollar will reach US$1,804.6 and in 2025 it will be US$2,488.2.
“The dollar was trading at $831.3 on February 9, depreciating 2% month by month. The parallel market rate was $1,145 on February 9, depreciating 2.2% month over month. On December 12, the government devalued the peso by 54%, to $800 per dollar. The Central Bank now aims for a 2% monthly devaluation. More devaluations are expected ahead,” the document states.
Inflation: the forecast of the consulting firms
The document maintains that inflation “soared to 211.4% (annualized) in December, being the highest rate in Latin America. This year, inflation is seen more than doubling from 2023 due to the removal of price controls and the narrowing of the gap between the official and parallel exchange rates.”
“Fiscal adjustment, the growth of the money supply and changes in the exchange rate system are the key factors to take into account,” he adds.
FocusEconomics specialists predict that Prices will increase by 296.9% on average in 2024, which represents an increase of 16.8 percentage points compared to a month ago, and 85.6% on average in 2025.
GDP
FocusEconomics analysts forecast GDP will contract 2.4% in 2024, 0.4 percentage points less than a month ago, and expand 3.1% in 2025.
Meanwhile, they see industrial production contracting by 2.7% in 2024, which represents a drop of 0.3 percentage points compared to a month ago, and a growth of 2.8% in 2025.
The consumer confidence index fell to 35.6 in January from 39.8 in December 2023. Experts see private consumption contracting by 4.8% in 2024, representing a drop of 0.3 percentage points from from the previous report.
Source: Ambito
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