2023 is shaping up to be a year of multiple economic challenges and the presidential race, with the associated uncertainty, only seems to deepen this dynamic.
With inflation that will continue to flirt with triple digits and interest rates that will inevitably remain high, pockets will not be able to recover and
activity will stagnate.
That is the gray panorama raised by
more than 40 players in the market,
including banks, consultancies and mutual funds, surveyed in the latest Latin Focus Consensus Forecast report.
Argentina will share a trend with the rest of the countries in the region, although its reality looks more bleak: while
in the other Latin American nations growth will slow down, in the country it will fall slightly.
"The economy should stagnate across the board this year.
Domestic demand is poised to contract
, hit by inflation and sky-high interest rates,
savings depleted
and an unfavorable business environment in the run-up to October's general election." ", remarked the report that also warned of
"significant risks for debt payment"
and a "deployment of pre-election policies" that are
hostile to the market.
Thus, the projections of this survey point to
a contraction of the economy of 0.1% this year
, an estimate 0.2% worse than what was expected a month ago, and a slight rebound of 0.5% in 2024.
At the same time, contrary to government projections, these market players believe that, after closing at around 95% last year,
inflation "should average considerably higher than in 2022
, fueled by the fall in the peso and the monetary financing of the deficit".
The main risks economists see are "volatile energy prices" and "
fiscal largesse
ahead of October."
In this way, they now expect inflation to close 2023 at around 97.7% and that it will only drop to around 77% in 2024.
Although these are the averages, there are several analysts who expect
inflation to actually exceed 100% this year
: the most pessimistic are the boutique consultancy EMFI, and Eco Go, who estimate that the increase in prices in the economy will be greater than 117 %.
Regarding the price of the dollar, the specialists consulted do not see changes in the exchange strategy of the Central Bank, but they do see an
acceleration in the depreciation of the peso
.
Thus, they calculate that
by the end of the year the official dollar will end at $342
and that this value will rise to $603.8 by the end of 2024.
This combo of higher inflation, high rates and a rise in the dollar will affect consumption.
The panelists consulted see
a drop of 0.4% in private consumption
this year and a slight rebound of 0.6% for the next.
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