With inflation unleashed, the projections for 2022 will exceed 90%, according to the projections of the Survey of Market Expectations (REM) of July 2022, which was released by the Central Bank of the Argentine Republic (BCRA). Towards the end of July 2022, market analysts projected retail inflation for this year of 90.2% year-on-year, which shows a rise of 14.2 percentage points above the previous survey forecast.
The REM projected inflation of 7.5% for August and forecasts a build-up of 90.2% year-on-year by 2022.
For the month of July 2022, the estimates of the current survey are not at all encouraging, and stood at 7.5% per month. On the other hand, the average of the TOP-10 of the best forecasters estimates it at 7.7%. Both projections far exceed the worst monthly index of this year, which was that of March and stood at 6.7%.
Likewise, the REM participants revised the inflation forecasts for 2023 placing it at 76.6% year-on-year and for 2024 at 60.0% year-on-year, which shows an increase of 12.0 and 9.8 percentage points higher than the previous survey, respectively. The projections come after a sharp deterioration of the main macroeconomic variables, after the departure from the Finance Palace of the then minister Martín Guzmán and the brief passage of Silvina Batakis. But it also includes the appointment of Sergio Massa as economy minister, as this month’s forecast was made between July 27 and 29. However, the announcement of the first known measures last Wednesday is not taken into account. Dollar projections
REM analysts also corrected their nominal exchange rate projections, so they expect the dollar to reach $167.16 in December 2022, representing a 62.8% increase over last year. GDP projections
The REM estimated real Gross Domestic Product (GDP) growth for 2022 of 3.4%, 0.2 p.p. above the previous projection. Meanwhile, the seasonally adjusted quarterly variation of GDP, for the second quarter of 2022, a growth of 0.5% was estimated with respect to seasonally adjusted measurement (s.e.), which is 1.2 percentage points higher in relation to the previous survey. The estimate of variation corresponding to the third quarter of 2022 was corrected from -0.5% s.e. to a contraction of 1.4% s.e. Meanwhile, they project for the fourth quarter of 2022 also a fall of 0.7% s.e. Rate Projections
In August 2022, the REM forecast a BADLAR rate of private banks of 57.9%, 6.8 p.p. higher than the average rate recorded during the month of July at 51.1%. There is evidence of a growing correction in the monthly projections, with forecasts of increase to reach 62.0% by the end of 2022.
