Argentina’s analysts predict 2023 inflation at 23.3% and 2025 economic growth at 4.8%. Recent surveys suggest a slight increase from prior forecasts. The central bank has lowered the interest rate, reporting the lowest monthly inflation since mid-2020, while the government prioritizes combating inflation amidst austerity measures and IMF negotiations.
Argentine analysts have maintained their inflation forecast for 2023 at 23.3%, as reported in the central bank’s market expectations survey released on Monday. This figure marks a slight increase of 0.1 percentage points from the previous month’s prediction. In addition, analysts have adjusted their economic growth forecast for 2025 upwards by 0.2 percentage points, projecting a growth rate of 4.8%.
The survey conducted from February 26 to 28 included input from 39 participants, comprising consultancies, research institutions, and financial entities. The INDEC statistics agency is expected to release February’s inflation data this Friday and report on economic growth for the last quarter of 2024 on March 19.
Recently, the central bank reduced its benchmark interest rate to 29% from 32% in late January, attributing this decision to a decline in inflation rates. January’s monthly inflation was recorded at 2.2%, the lowest since mid-2020. Although annual inflation had reached nearly 300% early last year, it has since decreased to approximately 85% in January, with significant increases observed in hospitality services, housing, and utility bills.
Analysts expect that February’s inflation will approximate or slightly exceed January’s figure, but a gradual decline is anticipated for the remainder of the year. The administration of President Javier Milei, who champions libertarian policies, prioritizes reducing inflation and has implemented strict austerity measures to maintain progress while negotiating a new loan with the International Monetary Fund.
In conclusion, Argentine analysts project a year-end inflation of 23.3% for 2023, with economic growth anticipated at 4.8% for 2025. The recent reduction in the benchmark interest rate and the decline in monthly inflation signify ongoing efforts by the government to manage the economy. Despite the previous surge in inflation, key measures are being taken to sustain positive trends as the government engages with international financial institutions.
Original Source: www.marketscreener.com
