The market already announces unfavorable data for the two variables that the average Argentine monitors closely: the inflation and the dollar. In the last Survey of Market Expectations (REM) published by the Central Bank (BCRA) last Friday, the average estimate of analysts indicates that the general price rise in March was 7%although some consultants evaluated it above 8%. And they forecast an average nominal exchange rate of $215 per dollar for April.
This complex scenario, marked by the acceleration of inflation, puts the Government’s economic team in trouble and leads it to launch measures such as the new obstacles to the dollar counted with liquidation (CCL), while the results of the agro dollar that would bring some calm to the foreign exchange markets.
This way, Attempts are being made to reverse, at least in the short term, the consequences of a historic drought that has deprived the Central Bank’s coffers of the possibility of making US$7 billion.
Dollar 2023: this is the new market forecast
An interesting and useful perspective on what is to come can be found in the REM survey of the Central Bank, which concentrates new forecasts on what will happen to the price of the US ticket at the end of the year and in 2023. The monetary authority published the results this Friday of the monthly survey carried out among consultants and analysts in the City. There, experts anticipate what can happen with the price of the dollar, inflation and GDP growth.
Wholesale dollar projections published by the Central Bank (BCRA)
Within the framework of the unstable economic situation and in the face of an urgent need for more profound measures to move the economy forward, the estimates of those who inquire about these economic variables indicate a monthly increase of $11.9 (+5.9%) per wholesale dollar until reaching a value of $215 in the fourth month of the year. In turn, the variation in the nominal exchange rate forecast by the experts is 100.2% for all of 2023, which will reach $346.23 at the end of December. This indicates that the market remains expectant and has not changed its outlook too much, which implies an advance in the official dollar, although below inflation.
Prices: what will happen to inflation
REM participants also assessed that March inflation rose to 7% and they anticipated a full-year build of 110%; that is, 10.2 percentage points (pp) above the forecast of the previous report.
Analysts participating in REM forecast inflation of 110% for all of 2023.
While for the Core CPI, the figures indicated a monthly variation of 6.8% for March, which is equivalent to 0.8 pp above the forecast of the previous survey.
Inflation projections of the Central Bank (BCRA) for the month of March
How much will the economy grow, according to the REM
Calculations on the real variation of the Gross Domestic Product (GDP) for this year anticipate a contraction of 2.7%, which worsens the forecast compared to the value contemplated in March. Meanwhile, by the year 2024, experts agree that there will be an annual economic improvement of 0.7%.
Price of the dollar: projections of economists
Pablo Repetto, Head of Research at Aurum Valores, tells iProfessional that in view of what came out in the Monetary Fund report and the inflation estimates, he believes that the monthly devaluation rate will shortly rise to at least 7% . However, he rules out a discreet jump in the months leading up to PASO.
“In principle, one would not expect that because the proliferation of the different exchange rates suggests that the economy is trying to avoid this. On the other hand, as time goes by, the cost of a devaluation is too high in electoral terms for the ruling party“says the economist.
With respect to financial dollars, he states that the expectations are that they will continue to march at the rate of growth of monetary aggregates, without overreactions.”We believe that the objective is to maintain the gap, neither for it to widen nor to narrow; they are doing maintaining a managed gap “, he comments.
For her part, Eliana Scialabba, Executive Director of CEEAXXI, told this medium that based on her estimates they believe that the wholesale exchange rate will have a 6% rise this month compared to March, which will put its price at $222. “In this way, it would reach an annual increase of 93%. This is because since Massa took office, that level of annual devaluation has been respected. However, it would be below inflation,” stresses Scialabba.
On the other hand, he concludes that this same increase that will be seen in the official will be reflected in the parallels.
