Analysts and operators participating in the Market Expectations Survey predicted how the dollar and inflation will evolve
While the Dolar blue is still anesthetized and the official continues to creep upward, uncertainty grows about what What will happen to the price of the US ticket in the next few months. In this context, an interesting perspective on what is to come can be found in the Central Bank REM survey.
This Friday, the monetary authority published this Friday the results of the monthly survey it carries out among consultants and analysts in the City. There, experts share their forecasts for the dollar price, inflation and GDP growth.
The financial market agents grouped in the Market Expectations Survey (REM) estimated that the official wholesale exchange rate will reach $ 118 per dollar at the end of December of this year. This is a strong drop of $ 6.40 with respect to the previous REM forecasts, probably attributable to the announcement of the Minister of Economy, Martín Guzmán, who said that this year the dollar will rise below inflation.
In parallel, The survey shows that analysts forecast a dollar price of $ 163.65 for December 2022.
The wholesale dollar closed this Friday at $ 90.37, so analysts consider that it has $ 27.63 to climb until the end of the year. This implies a rise of 30.5%, well above the 25 points predicted by the optimistic forecast of the Government.
The following graph shows the evolution of the average price of the dollar estimated for the end of the year by more than 40 banks and market consultants:
REM participants also anticipated that the February inflation amounted to 3.5%. In addition, market analysts projected that retail inflation will be around 48.1% year-on-year by year-end. This is down from the 50% they estimated last month. However, the number shows that there is still a high inflationary expectation for 2021 in the market. Again, the private forecast far exceeds the official forecast: the 2021 Budget postulates an inflation of 29% for this year.
Regarding the interest ratesBy the end of March, analysts forecast a Badlar rate (which applies to fixed-term deposits over $ 1 million) from private banks in pesos of 34.20%. The survey adds that the rate would reach 36.05% by December 2021.
What rebound in the economy the REM anticipates
REM analysts foresee a recovery of the Gross Domestic Product (GDP) around 6.2%. Here you can see an improvement in the outlook, given that last month they had forecast an improvement of only 5.5%.
The Market Expectations Survey (REM) consists of a systematic monitoring of the main short and medium-term macroeconomic forecasts that are usually made by specialized local and foreign analysts on the evolution of selected variables of the Argentine economy that are compiled by the Central Bank.
Expectations regarding retail prices, the interest rate, the nominal exchange rate, economic activity and the primary result of the national non-financial public sector are surveyed.
The latest report disseminates the results of the survey carried out between February 24 and 26, 2021. The forecasts of 43 participants were considered, among which are 27 consulting firms and local research centers, 13 financial entities from Argentina and 3 foreign analysts.
Dollar in 2021: this foresees FocusEconomics
In addition to the REM of the BCRA, another large survey highly regarded in the market is the one published monthly by FocusEconomics, the latest edition of which was released in mid-February.
In this case, some 40 national and foreign economists draw up their monthly forecasts of what will happen in the coming months.
For all of 2021, the analysts consulted in the aforementioned survey are projecting that the wholesale dollar I would go up to reach the 126.48 pesos.
There is a silver lining: in the FocusEconomics report for the month of January, the consensus was around $ 128. In other words, based on the latest report, a lower depreciation of the national currency is expected.
However, the almost $ 126.50 for each dollar (wholesaler) that the market now estimates implies a very important gap with respect to the $ 102.40 what the Government imagines.
In fact, in the report presented by the consultancy, the conclusion is that “the Argentine peso is destined to lose more ground in the future, in the middle of a high inflation and a fragile economy. Our panel considers that the exchange rate will end in 2021 at 126.48 pesos per dollar. “
The price of the dollar, according to experts
As mentioned, the consensus among the experts gathered by FocusEconomics is that the wholesale dollar will reach $ 126.48 by the end of the year.
When analyzing what is the more pessimistic forecast, it is observed that it corresponds to Empiria Consultores, which projects an exchange rate of $ 156.48. Behind, in a range between $ 140 and $ 144, are Barclays Capital, Citigroup Global Markets and Quantum Finanzas.
At the other end, among the forecasts that are closest to the Government’s objectives, are Scotiabank, which estimates a dollar at $ 106.10 at the end of the year, Seido ($ 112.09), C&T Asesores ($ 114.67) and Fitch Solutions ($ 115.30).
In the case of Eco go, the consulting firm foresees a wholesale greenback of the order of $ 130.20, that is to say, above the consensus. In this context, Federico Furiase, director of the consulting firm, stated that “the Argentine peso has been weakening at a rate of 4% per month.” According to the expert, the rate should begin to advance to the 1.3% monthly average since March if it is to reach the $ 102.40 that Guzmán mentioned.
For Furiase, the strategy is “to lower inflation and contain the wage fight, while negotiating wage increases using 30% per year as a reference.” In return, it warns that “the government is not yet willing to pay the cost of a rate hike“and” with a market that knows that there will be no fiscal adjustment in the election year. ”
At the same time, Tomás Ruiz Palacios, Cohen’s strategist, assured that with inflation on the rise, the government is now “attempting a new strategy: anchor the exchange rate to control price dynamics “.
The expert recalled that the Government has come to toughen the exchange market with stricter regulations; Furthermore, “the dynamics of spending moderated slightly and financing increased through debt placements in pesos in the local market. This eliminated the pressure of the exchange market and gradually contained operations in the parallel market. At the same time, the international context, with agricultural commodities, reaching the best level in the last 5 years, contributed to diminishing expectations of a slight jump in the exchange rate “.
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