While official data confirmed that inflation is experiencing a higher inertia than expected, an international report has just been published where a group of more than 40 economists from national and foreign banks and consultancies projected what will be the price of the official dollar for next december. They also estimated how much the other key variables would move, such as the CPI and activity.
In the new survey of FocusEconomics March, the forecasts made by the experts show some pessimism in the main indicatorsin the middle of an election year and in a context of scarcity of foreign currency, which serves both to sustain the economy and to cancel commitments abroad.
The conclusion is that the year presents itself with different storm clouds in sight, in the midst of social, political and economic tensions. As a result, analysts emphasize the fragility of the local situation for the coming months.
“The economy should contract this year characterized by extremely high inflation and high interest rates, coupled with falling savings, which will affect demand. Added to this is an unfavorable business environment in the run-up to the elections october generals”warns the FocusEconomics report.
Inflation and expected growth
Based on these volatility forecasts established by economists for the “significant risks” that are raised about debt payment compliance and pre-electoral political uncertainty, it is considered that there are several arguments that imply risks of a drop in activity.
According to the consensus of the surveyed analysts, the economy would contract 0.5% in 2023representing a drop of 0.4 percentage points from last month’s estimate.
The price of the dollar is in the magnifying glass of economists, since the official exchange rate is expected to rise at a faster rate.
By the side of the inflationfor the experts it is expected that “the average is notably higher this year than in 2022, since a devalued peso, monetary financing of the fiscal deficit and higher fuel prices generate pressure and volatile energy prices. Above all, the electoral period will be key,” they describe from FocusEconomics.
In short, the surveyed analysts expect average inflation to be 98.7% in 2023, which is 1.9 percentage points more than the estimate made in February.
Dollar: price expected by economists
Regarding the projections of economists for the wholesale dollar price at the end of the year, the trend continues to be upward compared to previous surveys. This responds to a greater inflationary inertia and the scarcity of foreign currency as a result of a field harvest that will be affected by the drought.
“The peso should depreciate further this year due to the continuous monetary financing of the fiscal deficit”, they insist again from FocusEconomics.
Thus, the consensus of the surveyed analysts indicates that the price of the wholesale US ticket for the last business day of December could reach $347.5, that is, around 5 pesos more than expected in the previous report (February)..
In this regard, if this price estimate for the wholesale dollar is met by the end of 2023, the accumulated devaluation throughout the year would be 96.2%. A percentage that is in tune with the 98.7% inflation that is expected for the same period analyzed
These data are increasingly distant from the Budget 2023 diagrammed by the Minister of Economy, Sergio Massa, and which was approved in the National Congress, where an exchange rate of $270 was stipulated for December.
Regarding these forecasts, in the Matba-Rofex futures and options market, a greater jump in the price of the wholesale dollar is expected, since the negotiated contracts place it at $395 for the last month of the year. In other words, about 47 pesos more than what was indicated in the FocusEconomics consensus.
It should be remembered that, in the present, the wholesale exchange rate is above 202 pesos.
The consensus of economists for the price of the wholesale dollar is that it will reach $348 by the end of the year.
Dollar price higher, economist by economist
On the side of the specific prices considered by the analysts for the wholesale dollar for the end of the year, the dispersion of prices continues to be very strong, since they start from a minimum of $286 to a maximum of $476.
This way, the highest forecasts for the official wholesale dollar price for the end of the year are led by the consultancy Eco Go, with a projection of $476. It is followed by Econviews ($461), C&T Asesores ($460) and Aurum Valores, with $450.
“We are anticipating that the exchange rate follows inflation until November and then, due to the change in management after the elections, there is an adjustment in the price of the dollar for December,” he told iProfessional Sebastian Menescaldieconomist and associate director of Eco Go.
In this regard, he considers that the inflation for March picks up a bit to around 7% as a floor, because “there is some carryover from the February food price increases, such as meat, and also an increase in regulated prices.”
In this sense, Juan Pablo Albornozeconomist Invecq, a consultant who forecasts $370 by the end of the year in FocusEconomics, tells iProfessional: “We expect an exchange correction by the end of 2023, that’s why that level. There is no type of anchor. All the nominal value of the economy runs between 5.5% and 6.5%. expectations are totally unanchored and the launched nominality. We expect inflation of at least 115% by 2023.”
For his part, Fernando Baeran economist at Quantum, who expects $367 for December, notes: “Basically, the wholesale exchange rate moves like inflation, the crawling peg (slow devaluation) stays with that trend.”
