MercoPress. South Atlantic News Agency

Argentina: BCRA monthly survey projects inflation in 2025 to stand at 25.9%

The BCRA's REM foresaw inflation to stand at 117.8% in 2024 and 25.9% this year

Argentina's Central Bank's (BCRA) latest issue of the Market Expectations Outlook (Relevamiento de Expectativas del Mercado - REM) released Tuesday in Buenos Aires foresaw that December's Consumer Price Index (CPI) to be announced next week by the National Institute of Statistics and Census (Indec) would stand at 2.7% for an annual rate of 117.8%.

These figures represented a slowdown under Libertarian President Javier Milei, with projected inflation of around 25.9% this year, the first semester yielding the following figures: January 2.5%, February 2.3%, March 2.3%, April 2.0%, May 1.9%, and June 1.8%. These results would be closer to the 24.8% achieved in December 2017 under then-President Mauricio Macri.

The REM also foresees the official US dollar to stand at AR$ $1,042 in January and at AR$ 1,205.5 by the end of the year.

Regarding the Gross Domestic Product (GDP), 2025 is expected to bring on a 4.5% growth after a 2.4% decline in 2024, while unemployment is projected to close at 7%, a slight improvement from 7.2% at the end of 2024. Foreign trade projections for 2025 anticipate exports of US$ 82.818 billion and imports worth US$ 67.449 billion. Interest rates are also expected to keep contracting, thus favoring credit and investment as the year progresses.

In short, the REM foresees a steady improvement amid controlled inflation, exchange rate stability, and moderate economic growth. If these projections are confirmed, Milei's Government would be able to lower the monthly devaluation to 1%.

The REM is a monthly study surveying the 42 main consultants in Buenos Aires' financial world. For the Eco Go consulting firm, the CPI for the month could be even lower: ”The year starts quietly with a first week of January where food registered a 0.5% increase. Thus, January inflation would be 2% monthly. The seasonality of the month, usually quiet in terms of inflation, adds to the low drag left by December and the decision to increase tariffs below inflation (1.6% gas, 1.8% electricity, and 1% water), containing the indicator.”