Regardless of who becomes Argentina's next president as of Decf. 10, 2023, Moody's foresees inflation in the South American country next year will reach 350%. The rating agency's baseline scenario scenario also contemplates an economic contraction of 3.5% by 2023, followed by another 2.5% next year, with prices climbing up to 25% each month.
Investment banks, economists, traders, and rating agencies agree that the road to 2024 is becoming increasingly dire. Moody's analysts expect inflation to soar to approximately 200% in 2023 and a staggering 350% in 2024, which would imply average monthly increases in the Consumer Price Index (CPI) of more than 25%.
We have a scenario that is subject to many issues. Among them [is] a change of government. And we still don't know what policies they will apply. But what we maintain is a scenario of high inflation, relatively lower demand for fuel, and a crude oil price following international volatility with a ceiling, said Martina Gallardo Barreyro, Vice President and Senior Credit Officer at Moody's.
She also warned that a worsening scenario in the economy is expected whoever wins on Oct. 22 but she also explained that things would not be much different if a runoff, scheduled for Nov. 19, is needed.
Recovery is going to take time. There are issues that will continue next year, such as inflation. We mentioned a number of 350%. It could be lower, but it could also be higher. There is a lot of uncertainty and we are more comfortable dealing with those kinds of numbers than trying to figure out if there is such and such a thing or such and such a thing. We don't know what the policies will actually be, so that's our baseline scenario, she also pointed out.
Phillip Toculescu, one of the report's authors, also explained that I don't see the direct link that if one wins or the other wins it will change the outlook too much.
However, some sectors such as energy would remain among the country's most robust activities despite the adverse context. Although access to credit for companies and provincial governments is expected to worsen, hydrocarbon sector metrics would remain solid despite the drop in demand due to lower purchasing power.
Top Comments
Disclaimer & comment rulesTænk & Brasileiro
Oct 06th, 2023 - 08:58 pm +1I would have thought you two preferred another tune...
https://youtu.be/Dsg21xx6mgA?si=xLQAe2oJsohCaUrT
In any case, I do send my sincere greetings from 3000mt...
¡Saludos de Valle Nevado!
kkkkkkk
Oct 06th, 2023 - 02:07 pm 0Is NATO surrendering to Russia? True?
But the war hasn't even started yet. (surprise emoji)
Moody's? What is Moody's other than just another piece of war equipment?
Write: the war will only end with the Russian flag in Odessa!
https://www.youtube.com/watch?v=WDQoefohcRk&list=FLmXPTu1f8AdGlizWNiASx2A&index=180
Brasileiro
Oct 06th, 2023 - 03:04 pm 0In regards to the Ukrainian conflict - the
Russian forces are reporting significant surrendering of Ukrainian soldiers.
However I suggest you pay attention to the the Moody's analysts report - as it will severally affect the Argentine economy...
War with the Russian Federation, in my opinion is a zero sum disaster.
* * *
Meanwhile today's lunch is again a perfectly grilled sirloin steak with a stuffed baked potato (garlic butter - sour cream - chives) accompanied with wine.
Snow conditions here have been outstanding, but I expect this is the last week for me. The farm now needs attention soon...
¡Saludos de Valle Nevado!
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