The economist maintained that the equilibrium value is $1,600. He warned about the appreciation of the peso. How do you see inflation for 2025?
The economist Orlando Ferrereshead of the consulting firm OJF & Asociados, pointed out that the official dollar should be adjusted to avoid an exchange rate delay that affects economic competitiveness. In line with Domingo Cavallo’s warnings about the real appreciation of the peso, Ferreres explained that a higher exchange rate is necessary to achieve “equilibrium parity.”
According to Ferreres, the theoretical equilibrium value of the official dollar is at $1,600a number considerably higher than the current one. Although he recognized that capital inflows in sectors such as agriculture, mining and energy can momentarily sustain the situation, he emphasized that “reserves are not that high,” which requires prudence in exchange management.
The risk of peso appreciation
Ferreres’ concern adds to the analysis of Cavallo, who recently warned that the Argentine peso is overvalued by around 20%, a level reminiscent of the final period of convertibility (1999-2001). At that time, the appreciation of the peso caused deflation and worsened the economic recession.
For both economists, the exchange rate delay could have adverse consequences, such as an increase in imports and a loss of competitiveness for the export and industrial sectors. This scenario could make the accumulation of reserves even more difficult and generate additional pressures on the balance of payments.
Inflationary scenarios for 2025
Ferreres also shared his projections on inflation and economic growth in 2025. According to the economist, there are three possible scenarios:
- Base scenario: Inflation of 30% and GDP growth of 4%.
- Optimistic scenario: Inflation reduced to 20% and growth of 5%.
- Pessimistic scenario: Higher inflation, with lower economic growth.
Although the base scenario is the most likely, Ferreres highlighted that factors such as the accumulation of reserves, fiscal policy and the competitiveness of the exchange rate will be decisive in avoiding an unfavorable result.
Source: Ambito
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