Market slightly trims Argentina’s inflation expectations for 2023

Following candidacy confirmations, consulting firms surveyed by the Central Bank forecast a 142.4% increase in prices for the year

Financial analysts surveyed in June by Argentina’s Central Bank expect the country’s final 2023 inflation to total 142.4%, 5 points lower than what they forecasted in May. 

This update was published in the June edition of the Market Expectations Survey (REM, by its Spanish initials) released on Friday, an economic survey conducted with 39 participants — 26 local and international consulting firms and research centers, as well as 13 Argentine financial entities. 

These new predictions come two weeks after the deadline to file for presidential candidacies, which determined who will be competing to become the country’s next president in this year’s elections.

Their expected inflation rate for June is 7.3%. For May, they had originally forecasted 9% inflation, but it ended up being 7.8% — a 1.2% overstatement.

“New information suggesting that monthly inflation moderated even more when compared to May was released last month after REM participants provided their forecasts to the Central Bank,” the REM report said. This “new information” includes the Central Bank retail price monitor and June’s Buenos Aires City inflation, which was published Friday and amounted 7.1% — a 0.4% dip compared to May.

Last month, analysts had forecasted a 3% drop in the country’s GDP. It’s worth noting that REM participants started the year predicting a 0.5% growth for 2023, a statement made in January before the full impact of the historic drought was entirely known.

Analysts projected US$70.39 billion in exports for the year (a slight decrease from their US$71.05 billion May prediction), an average exchange rate of 435.32 pesos to the US dollar for the end of the year (10 pesos higher than last month’s prediction) and a 7% unemployment rate (0.1% higher than their May expectations).

The REM analysts also expect fixed-term deposits in July and August to surpass inflation and the crawling peg rate.

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