In line with this news, the European Central Bank will raise the rate to 3.0% per annum and the Bank of England to 4.0% per annum. What do we mean by this? There is no room for low rates In the world, the international scenario is not favorable to the developed world, and raw materials are going to suffer falls in this context.
What will the Argentine economy be like in 2023?
In the first month of the year, a inflation monthly between 5.5% and 6%, this implies that for the next 12 months it is projected to be around 100% per year.
The collection The tax rate for the month of January increased 93.4% annually, when it is speculated that inflation in the last 12 months would be around 98.0%, we have been warning about this from these pages, inflation is having a negative impact on collection, without income of the soybean dollar the State will need more financing or monetary issue to cover its deficit.
He official dollar in the first month of the year it increased by 5.5%, it is clear that the Central Bank will seek this year to slow down the rise of the official dollar, to turn it into an anchor for prices. The problem is that there is a great distortion of relative prices, and when readjustments occur, they have an impact on inflation.
For example, the meat it had increased very little during the year 2022, and in the year 2023 due to the lack of animals in a single month it went from $300 to $450 with an increase of 50%, and it still shows a delay in its annual evolution since in 12 months increases 66.6% when expected inflation is around 98.0%.
The meat It impacts the price index by 10%, if in February it increases by 30.0% on the counter, it will transfer 3.0% to the index. With this expectation, inflation in February points to at least 6.0%, for this reason we believe that annual inflation of 100.0% points to a floor for the government.
What about financially?
Banks continue to capture fixed-term deposits without problems, in January they would be increasing at a rate of 120% per year, but loans to the private sector grow at 68% per year, this indicates that while society saves, the financing goes to hands of the state, and defunding the private sector.
In this scenario we are assured that growth will be absent in 2023. Financial institutions are at the service of the State to finance the public deficit, this means that banks are tied to state risk, and this is the reason for their poor performance in the capital market.
In recent months we have seen a 10% drop in the stock of fixed term deposits adjusted for inflation, the market is observing a divorce between the perception of inflation and what INDEC actually dictates regarding monthly inflation, this led many investors to leave fixed-term deposits adjusted for inflation and invest in terms traditional landlines that today pay an annual rate of 6.25%, or buy dollars as a security of value.
conclusions
The world market is not showing a tailwind for the entire emerging world, in the specific case of Latin America it would grow 1.8% in 2023 and 2.1% in 2024, well below the expectations of world growth reported by the IMF. The rest of the emerging world would grow at a rate of more than 3.2% in 2022 and more than 3.7% in 2023.
We do not see a rising scenario for the raw MaterialsAfter the war, wheat, corn and soybeans lowered their prices, indicating that the expectations of lower supply disappeared on the horizon, and that the demand is not as strong as it seems. Consequently, prices today are several steps lower than during 2022, and there is nothing to suggest that we will return to the highs.
Argentina is a country that has few reserves, a fiscal deficit and does not have international financing. This brings it to its knees in the face of economic activity, which does not have dollars to import, the private sector lacks financing because it is absorbed by the State, and lives in a scenario of high tax pressure that keeps businessmen from investing.
The market shows solidity in the price of Argentine bondsThe main reason is the purchase of US$ 1,000 million by the State, half of this amount would be invested, when the State disappears buying, everything suggests that profit-taking is just around the corner. In this scenario, the price of the shares can also be adjusted, not to get caught up, the one who earned money takes profits and puts dollars in his pocket.
For now, and only for now, we do not see a rising scenario in the interest rates In the local market, neither is there a threat of devaluation of the Brazilian real, this helps the economy not to have any more problems. The threat to Argentina’s economic growth comes from growing inflation, great distortion of relative prices and an increase in the exchange rate gap that generates uncertainty. The problems are intense, the world in the years 2023 and 2024 will not bring a tailwind. In this stage, Who can defend us? Not the Chapulin Colorado.
Economic, financial and business analyst, speaker, researcher and private consultant.
Source: Ambito
David William is a talented author who has made a name for himself in the world of writing. He is a professional author who writes on a wide range of topics, from general interest to opinion news. David is currently working as a writer at 24 hours worlds where he brings his unique perspective and in-depth research to his articles, making them both informative and engaging.
