In the last Latinfocus, a report that compiles forecasts from international banks about the countries, analysts counted
an official dollar of $347.5
for December , against the current $210. That is, the dollar will rise 65% until the end of year, or in other words, the peso
will devalue 38%.
Along the same lines, in a
paper
circulating these days, the US bank Wells Fargo estimated that
Argentina will devalue its official exchange rate to around $340 per dollar
by the end of the year, which implies
a depreciation of around 40%
of current levels, as the emerging markets economist and currency strategist Brendan McKenna wrote in a note, the Bloomberg agency published.
The entity believes that
it is probable that the Government will maintain a constant rate of devaluation
until the end of the second quarter.
"The authorities will seek
to slow down the rate of depreciation ahead of the elections
in an attempt for the current Administration or another candidate from the Frente de Todos coalition to gain momentum," they indicated,
The recipe is already known.
Pre-election exchange rate delay, followed by a post-election devaluation.
"Once the next Administration is determined, it is expected that currency devaluation could become a more realistic option," Wells Fargo added.
The bank expects
an explicit devaluation
of the peso by the end of 2023.
That depreciation could be large enough to bring the
official exchange rate to $340
by the end of 2023, they argue, implying a loss in value of the peso
of around 40%
from current levels.
But Wells Fargo analysts go a little further.
They say that even after that devaluation, "the currency is likely to be overvalued as a result of capital controls."
In its latest staff report, the International Monetary Fund
considers that the exchange rate is overvalued between 10 and 25%.
The receding economy
Along with a sharp devaluation towards the end of the year, the Latinfocus report pointed to a contraction of the economy for this year.
"Extremely high interest rates and inflation, along with falling savings, will hit domestic demand, as will an unfavorable business environment in the run-up to the October general election. Significant debt, repayment risks and pre-election political uncertainty pose downside risks," the paper said.
Thus, analysts estimate an average inflation of 98.7% in 2023 and 91.2% in 2024.
As for the level of activity, estimates are around 3%, much more pessimistic than the 0% expected by the World Bank, as reported on Tuesday.
NE
look also
The World Bank is more pessimistic about Argentina than the IMF: it expects 0% growth for this year
The largest trade deficit with Brazil in five years was reached in March
