MercoPress. South Atlantic News Agency

Central Bank report corrects Argentina's inflation projections upwards

For the next twelve months, the REM anticipates inflation will reach 146.5%.

According to the Argentine Central Bank's (BCRA) Market Expectations Survey (Relevamiento de Expectativas de Mercado - REM) report published Friday, the panel of economists issuing that document has made an upward correction to their inflation forecasts for 2023, placing it at 126.4%, or 16.4 percentage points above April's projections, while last month's Consumer Price Index (CPI) is believed to be of 7.5%. The National Institute of Statistics and Census (Indec) will release the official data on May 12.

For the next twelve months, the REM anticipates inflation will reach 146.5%. And for 2023, the experts estimate a real variation of the Gross Domestic Product (GDP) of -3.1%, which means a worsening of 0.5 percentage points with respect to the previous month's forecast (-2.6%). For the second quarter of this year, a contraction of 1.9% is projected, and for the July-September period, the GDP is estimated to remain stagnant (0% variation).

The survey also estimated that during the first quarter of 2023 GDP contracted by 0.7% in the seasonally adjusted variation with respect to the last three months of 2022. In this case, the forecast improved by 0.2 points with respect to the previous report, published in March.

April was a particularly active month for the exchange market, since the “blue” (a euphemism for “black market”) dollar jumped from AR$ 390 to AR$ 495 in a matter of days, and then stabilized around AR$ 460. The specialists predicted a more aggressive official devaluation than in previous months. The official exchange rate, which currently stands around AR$ 234 is expected to be at AR$398.5 by the end of the year, (AR$ 52.27 above March's projections) and AR$ 616.5 in April of 2024, (AR$ 161.5 higher than in March's predictions).