While the Government advances in the details of the agreement with the International Monetary Fund (IMF), some 50 local and foreign firms project a greater acceleration from inflation, that the year would end in 53,3%, almost two points more than stipulated in the previous report. In addition, they locate the slide of the official exchange rate in $158.90 by the end of 2022 and they say GDP will advance 2.4%.
The data comes from the average of the estimates compiled in the last publication of the LatinFocus Consensus Forecast, with consultants that are located above or below depending on the scenario they project.
Econviews, for instance, estimates an official dollar at $174.67 and inflation at 58%. “We see more devaluation and that’s why we have more projected inflation. We believe that the IMF is going to want the exchange rate gap to be lowered and for that an official exchange rate is needed that generates more flows in the MULC and allows the Central Bank to loosen some restrictions. We project an increase in the exchange rate of 70%, which may be a little less. What we don’t see is that the dollar continues to fall behind inflation,” he explained to THE NATION the economist Andres Borenstein.
For his part, Camilo Tiscornia, director of C&T Economic Advisors, believes that the official dollar will close at $143.86 at the end of the year and that inflation will be around 52.6%. “The dollar influences the projection of inflation that each one supposes. In our case, the hypothesis is that the agreement with the IMF is signed and, in this framework, the dollar moves faster, but it does not make the leap. We believe that they are going to move it to 3% per month, that is to say that the inflation-adjusted dollar will fall again this year, but not much. The fall is slowed down a bit, but the process is not reversed. It is a hypothesis with political seasoning: the government has to adjust the rates and then it is going to move the dollar as little as necessary. Obviously, the risk is that there is a jump and they move it faster. It will depend on the harvest.he pointed out.
Meanwhile, Elisabet Bacigalupo, head of the macroeconomic team at abebeb -which projects a dollar at $158.39 and inflation of 50.3%-, said that the Government cannot continue procrastinating the exchange rule and in fact began to devalue more strongly. “Post agreement will increase the crawling peg (gradual updating of the exchange rate) to beat inflation. If you continue below, the exchange rate gap jumps, your expectations are unanchored and you cannot accumulate reserves. That is why we think of an acceleration of the crawling peg”, he pointed.
Lucio Garay Méndez, economist at EcoGo, agreed that there is no margin to delay the exchange rate as in 2021, when the peso depreciated 23%, and said that there are incentives from the Central Bank to come back to crawling peg and match inflation gradually.
“It’s going to speed up the crawling peg, but gradually, so as not to fully impact inflation. Unlike 2021, this year the update of the exchange rate it would be 58% and that makes inflation higher than last year. Another of the relative prices that you have to correct are the rates and then you have one good amount of pesos of the strong emission of 2021; another of the drivers will be the salaries, since it is difficult for the official guideline of 40% to be met,” he listed.
Lastly, he said that To meet the fiscal goal of 2.5% of GDP, more inflation is needed to swell income and make sure that the most important component, which are pensions, does not grow in terms of the product. “The model closes with more inflation and fertilizer prices are also rising quite a bit, which can impact the cost of food production. That hits you in international prices and can be transferred to the gondolas. In short, you have relative prices that are corrected, prices that are not going to want to be below inflation and small temporary increases that will end up having an impact”, The economist concluded EcoGo, a consulting firm that forecasts a dollar at $161 and inflation of 59.5%.