the price of the DOLLAR by the end of the year, according to 40 experts

Amid mounting financial stress over the failure to resolve sovereign debt, the central bank published the results of its periodic survey among consultants and analysts of the City that accounts for the forecasts of the specialists regarding dollar priceinflation prices and GDP growth, among other issues.

The financial market agents grouped in the Market Expectations Survey (REM) estimated that the average nominal exchange rate reaches $ 88 per dollar in December of this year (a decrease of $ 0.5 with respect to the previous REM), and $ 122.5 per dollar in December 2021.

REM participants also anticipated that the June inflation amounted to two%. In addition, market analysts projected that retail inflation will be around 40.7% year-on-year at the end of the year, which reduces the forecast that the REM had provided the previous month by 2.6 percentage points. In other words, inflation expectations fell among analysts.

As for the interest rates, for July, analysts forecast a Badlar rate (which applies to fixed-term deposits above $ 1 million) from private banks in pesos of 30% and a stable monthly path until reaching 30.8% in December. The survey adds that the rate would drop back slightly to 30% by December 2021.

The REM anticipates a collapse of the economy

REM analysts predict a strong retraction of the Gross Domestic Product (GDP) around 12% , which marks a deterioration of 2.5 additional percentage points to the projection made the previous month (9.5%).

“Although the expectation of a contraction in GDP for the second quarter of the year worsened compared to the previous survey, REM participants forecast an expansion of activity from the third quarter of 2020, which denotes that the effect of the pandemic is perceived as transitory, “notes the Central Bank in its report.

The Market Expectations Survey (REM) consists of a systematic monitoring of the main short and medium-term macroeconomic forecasts that are usually carried out by specialized analysts, local and foreign, on the evolution of selected variables of the Argentine economy that the Central Bank compiles.

Expectations regarding retail prices, interest rate, nominal exchange rate, economic activity and the primary result of the national non-financial public sector are highlighted.

The latest report disseminates the results of the survey carried out between June 26 and 30, 2020. The forecasts of 41 participants were considered., among which are 27 local consulting firms and research centers, 12 Argentine financial entities and 2 foreign analysts.

FocusEconomics: more forecasts on the economy and the dollar

The REM of the Central Bank is taken as a reference in the market, which also looks closely at the survey carried out by FocusEconomics. The latter is carried out among 40 national and foreign economists and investment banks.

Market concern is seen in the latest monthly report released by FocusEconomics in mid-June, which marks a clear upward trend for the dollar and other key data at high levels.

In the general situation, the survey highlights a economic contraction.

“The economy already in crisis of Argentina will contract strongly this year. The pandemic is further affecting internal and external demand, as well as a worsening of the country’s problematic fiscal position, “summarizes the letter in its conclusions.

So it limits that the successful result of the renegotiation of the debt “be crucial to avoid further financial turmoil and gain access to sources of financing external, “he concludes.

In this way, the consensus of the economists surveyed by FocusEconomics considers that the economy I know would contract 8.8% in 2020, which is 1.9 percentage points more than the previous month’s estimate, when a negative of 6.9% was projected.

Beyond this, among the main variables that concentrate all eyes of Argentines is the dollar.

Dollar: 2020 price

All the luck of the Government of Alberto Fernández, and the country, seems to be tied to the outcome in the renegotiation with the creditors of the debt externalFurthermore, the brake that has been suffering the activity for years has also weighed.

A headache that is greatly potentiated with the current pandemic, and that generates instability and uncertainty to future.

Thus, the new consensus of the experts relieved by FocusEconomics indicates that he exchange rate will quote by the end of the year to $ 88.61, a figure that represents an increase of more than two pesos (2.4%) compared to the forecasts of the previous report (May), since in the same a value of $ 86.56 was projected for December.

According to the last closing registered in the price of the ticket at market wholesaler, what happened with $ 69.61, from now until the end of the year there would be an increase in its value (a devaluation) of the 27.3%.

A result that would imply an increase in the price of the dollar exchange rate during everything he 2020 of the 47.9 percent.

And by first time in several months, this percentage would go by above of the inflation predicted by the same economists for this whole year, which according to estimates would be 45.4%.

Dollar price forecasts for the end of the year continue to rise.

He consensus estimated by analysts surveyed by FocusEconomics on the price of wholesale dollar by the end of the year at $ 88.61, it’s barely lower to the price that the American ticket for the position of end of december at Rofex-Matba futures and options market, which exceeds $ 88.90.

“The prolonged restructuring process together with the economic data exerted a negative pressure on coin“, concludes the survey on this variable.

As for the point estimates of the economists with higher projections on the level of the exchange rate for December, the experts of Citigroup Global Mkts, which they hope will reach $ 102, followed by the bank HSBC ($ 100) and Econviews, also with a perspective of $ 100 for the end of the year.

“We think that the exchange rate is coming falling behind in recent months, more than anything considering the international situation and the levels of inflation going forward, “he says to iProfessional Mariela Díaz Romero, Senior Economist of Econviews.

And he details: “With the exchange rate at $ 100 and inflation at 50% in the year, we have a 12% real depreciation. Something that seems to us reasonable in a context of debt settlement, a 10% drop in GDP and an adverse external context. ”

If the devaluation of the other regional currencies and only the domestic context was evaluated, according to the data published in the June report, for the first time analysts estimate that the prices of the economy would advance two percentage points less than the exchange rate.

On the side of financial analysts who forecast a less devaluation for the end of 2020, can be highlighted to Fitch Solutions ($ 80.03), followed by the local consultant Quantum Finance ($ 81.50), and two heavy pesos: Goldman Sachs and Barclays, both with an estimate of 82 pesos per dollar.

“The devaluation of the weight not determined by central bankbut the peso will depreciate more or less depending on the circumstances (shocks, political context) and economic policies “, analyzes iProfessional the Chief Economist of FAITHFUL, Juan Luis Bour.

To add that “the exchange rate repression of the foreign trade hides, does not solve, imbalances. A consistent economic program – as the Minister proclaims Martín Guzmán– and to get the economy out of the depression will require some adjustment of the exchange rate. It can be sooner or later, the later and messy it is, the bigger the jump “of the value of the dollar.

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