How much will they reach at the end of 2024? dollar and the inflation in Argentina, according to local and international analysts? The panelists of FocusEconomics They foresee a jump in the official dollar of 64.6% between now and the end of the year, to reach an exchange rate of 1,331 pesos by the end of December. They also projected a jump in inflation to 247.4% in the annual average and 161.6% end to end, above the 211.4% in 2023 that made Argentina the country with the highest inflation in the world.
Now, analysts expect the country to at least lead the regional ranking of increase in consumer price variation: “This year, inflation will average the highest in Latin America due to the elimination of price controls and the weakening of official and parallel exchange rates. A weaker than expected currency is a growing risk. FocusEconomics panelists forecast that consumer prices will rise by 247.4% on average in 2024, down 9.5 percentage points from a month ago, and up 74.4% on average in 2025. ″.
The five panelists who project higher inflation are:
- MAPFRE Economics 275 percent
- Capital Economics 238.5 percent.
- EmergingMarketWatch 225 percent.
- S&P Global Ratings 215 percent.
- VDC Consulting 200 percent.
Regarding the dollar, the analysts consulted highlighted that Argentina has a moving parity and that the Central Bank allows the peso to depreciate at a controlled rate in the official market. “The peso was trading at ARS 899.0 per dollar on June 7, depreciating 2% month over month. The parallel market exchange rate was quoted on June 7 at ARS 1,265 per dollar, depreciating 17.8% month-on-month. The official and parallel rates should weaken at the end of 2024. The panelists predict that the peso will end 2024 at $1,331.1 per dollar and will end 2025 at $1,952.5 per dollar,” they stated.
The five panelists who project a greater increase in the dollar are:
- S&P Global Ratings 2,100
- LCG 1,812
- Econviews 1,609
- Fitch Ratings 1,613
- Capital Economics 1,600
- Standard Chartered 1,550
Within the framework of the first six months of the Government of Javier Mileithe monthly report that surveys the projections of thirty investment banks, consultancies and financial trading agencies for the different Latin American countries, outlined its forecasts for the Argentine economy in 2024. Regarding activity, they highlighted a brake on the fall that had been observed in the first trimester.
“The data for the first quarter are pessimistic: economic activity fell month after month throughout the quarter. As for the second quarter, the economic slowdown should be easing and the available indicators are moderately optimistic: In April, industrial production recovered from March, inflation was below market expectations and exports increased by double digits as the agricultural sector recovered from last year’s severe drought. Additionally, consumer confidence increased for the fourth consecutive month in May,” the report stated.
The economists consulted expect a contraction of GDP due to the macroeconomic adjustment plan that Milei launched with fiscal adjustment, currency devaluation and elimination of price controls.
“However, a notable rebound in agricultural production should provide some support. The fate of the government’s reform package, which is currently stalled in the Senate, is a key factor to watch. FocusEconomics panelists predict that GDP will contract by 3.3% in 2024, 0.1 percentage points less than a month ago, and will expand by 3.5% in 2025,” they projected.
Regarding the external sector, they predict that exports of goods will jump 18.3% in the year, 0.7 points less than a month ago, and 7.2% in 2025. Imports would fall 16.1% in 2024, 1 .8 points less than a month ago, and will increase 12.5% in 2025. “Our panelists see a trade surplus of $17.1 billion in 2024 and a trade surplus of $15 billion in 2025,” the report highlighted.
