Saturday, September 23, 2023

The market is expecting a sharp rise in inflation and the dollar


In the latest report from the Market expectations survey (REM), published by the Banco Central (BCRA), analysts have adjusted their forecasts for the year 2023, and the economic situation is a cause for concern. The annual estimate of inflation recorded a significant increase and is now at 169.3%.

This increase in forecasts comes according to the data from Consumer Price Index (IPC), which the INDEC delivered on the previous day to the month of August which achieved 12.4%. It should be noted that the consultants who contributed to the REM expected this lower inflation11.8%.

Private measurements ensure inflation for September will continue to be in double digits. The REM shows that analysts’ expectations are above The Argentine economy is negative. The following points particularly stand out:

  • Expected inflation for 2023 was 169.3%an increase of 28.6 percentage points compared to the previous survey.
  • The growth of gross domestic product (real GDP) is expected -3.0% in 2023, a contraction of 0.2 percentage points compared to the previous survey.
  • Unemployment is expected 7.2% in the second quarter of 2023, unchanged from the previous survey.
  • The interest rate BADLAR of private banks is expected to rise to 124.5% in December 2023 from currently 113.0%.
  • The nominal exchange rate is expected to remain in place stable at $350 per dollar until October 2023and then begins to lose value.
  • He primary budget deficit of the non-financial national public sector (SPNF) is expected to be $4,488 billion in 2023 an increase of $344 billion compared to the previous survey.

These results show that analysts expect this and inflation will remain high in the coming months and that Argentina’s economy will shrink in 2023.

REM: Inflation and the dollar

The outlook for the coming months is no more encouraging. Analysts predict a The monthly inflation rate for September is 12.0%, and the annual forecast for all of 2023 remains a worrying 169.3%, an increase of 28.6 percentage points compared to the previous survey.

In conclusion, according to REM data, inflation has increased for the year 2023 at a critical point in the economy exceeded all previous expectations and caused uncertainty in the market.

As for the official dollar, on the other hand, forecasts suggest that the price will rise until the end of this year It would be approximately $510.01. However, in September and October No changes are expected significantly due to the policy of freezing devaluation implemented by the government, an increase in November $405.47 per unit. By December, the value of the dollar is expected to exceed $500.

Expectations point to this for 2024 the dollar would continue its rise to reach $669.81 in January and $738.01 in February.

In addition to inflation and the exchange rate, the REM report also reflects concerns about inflation gross domestic product (GDP), with a projected decline of 3% by 2023, 0.2 percentage points less than previous estimates. A decline of 0.6% is expected by 2024.

It is important to remember the REM projections They are based on surveys conducted by private consulting firms and do not represent the BCRA’s own analysis. meaning they reflect the market and private analysts’ perceptions of the national economy.

Nation World News Desk
Nation World News Desk
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