MercoPress. South Atlantic News Agency
Argentina's 2017 inflation expected to reach 19.7%, reveals Central bank poll
The median annual inflation expectation for 2016 fell to 39.4% in the survey from 39.6% in the previous poll. Last month, the median expectation for 2017 inflation was 20%. Argentina's consumer prices will rise by 19.7% in 2017, according to a central bank poll of 56 economists published this week, a slight drop from median expectations in last month's survey but still higher than the central bank's target.
Latin America's third-largest economy will shrink by 2% in 2016, according to the median estimate in the poll, compared with expectations for a 1.7% annual contraction in the recession-stricken economy last month.
The median annual inflation expectation for 2016 fell to 39.4% in the survey from 39.6% in the previous poll. Last month, the median expectation for 2017 inflation was 20%.
The central bank is targeting inflation between 12 and 17% next year, and has kept interest rates unchanged for the past six weeks, after previously lowering them for eight straight weeks.
The economists surveyed expect 3.2% growth next year, unchanged from the median forecast in the previous month and lower than the government's expectation for 3.5% growth.
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Read all commentsArgentina thrives on an inflated sense of worth. We see here a belief that an economy based not on the production of goods and services but on the printing of ever-larger denomination bills backed by high-interest indebtedness is the path to increased national wealth. The house-of-cards euphoria is typically short-lived, and often ends with the dawning realisation that the party is over and no one will lend them any more money.
Nov 06th, 2016 - 02:58 am +3I finally found an article that at least partially explains the situation:
Nov 06th, 2016 - 02:41 pm +3http://www.buenosairesherald.com/article/219992/peso-posts-monthlong-strengthening-streak
In summary; more money in the form of borrowing and some investment has been flowing into the country since Marci settled with the vulture funds, and this helped strengthen the peso. There is also some money coming in from the 'whitewash' and tax amnesty on money hidden abroad.
Plus the Central Bank has promised to keep interest rates above the rate of inflation, which makes it worthwhile investing in the peso. All this has meant it has mostly been rising against the dollar since March.
It's interesting to see that the only big fall was due to the Brexit vote; I'm not sure if that was due to the dollar strengthening vs other currencies, but it does show Argentina is still affected by outside events.
Yeah yeah Fred. We get it, you hate Argentina.
Nov 05th, 2016 - 02:00 pm +2Commenting for this story is now closed.
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