2023-08-15 01:24:00
The investment bank JP Morgan forecast on Monday a greater uncertainty for the coming months due to the impact that the results of the STEP will generate on most of the macroeconomic variables.
In a report, the entity warned that “the rise in popularity of Milei juxtaposed with the mediocre popularity of Together for Change and the government coalition Unión por la Patria indicates a coming period of greater uncertainty.”
Likewise, JP Morgan stated: “First, we foresee increasing pressures on the exchange rate, which will translate into an increase in interest rates, a widening gap between the parallel and the official exchange rate.
“In another order of things, we must recognize the upward risks that weigh on our already high monthly forecasts for inflation for August, September and October”he added, and specified that these risks derive from the “uncertain political trajectory that the country is preparing to follow” and from the widening of the currency gap.
Inflation expectations in the United States fell to the lowest level since 2021
In this regard, the Central Bank devalued 22% the official exchange rate taking it to $365the blue dollar touched the $690 and financial dollars rose 15%.
The analysis foresees a pessimistic panorama given that a correction in spending, with the ruling party seeking to reach the ballotage, “seems unlikely, even in light of IMF program commitments.”
The status of the agreement with the IMF
However, the Fund welcomed the measures taken by the economic team: “We value the recent policy actions of the authorities and the commitment to safeguard stability, rebuild reserves and strengthen fiscal order,” said Julie Kozack, Director of Communications of the organization.
“On July 28, the Argentine authorities and the IMF staff reached an agreement at the staff level on the fifth and sixth reviews under the agreement,” it said.
The IMF set a date for the disbursements for Argentina and supported the devaluation
“The agreement is subject to the approval of the Executive Board of the IMF, which It is expected to meet on August 23 to approve the agreed disbursements”added the official.
These disbursements would amount to US$ 7500 million.
Source: NA
LD / ED
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