Private inflation projections average 48.4 percent this year and 40 percent next.
The high levels of inflation in Argentina are the consequence of a “precarious macro-economy”, which could in the medium term lead to “upheavals in the exchange rate and prices”, warned Pablo Besmedrisnik, director of Invenomica consultants.
Several inflation projections for 2021 even exceed 50%: UBS bank (54.9%), Credit Suisse (54.1%), OJF consultants headed by Orlando Ferreres (51.8%), Moody’s (51 , 7%), Economtrica (51.6%) and Banco BBVA (50 percent).
Meanwhile, the official forecast continues to be the 2021 budget estimate of 29%, although Chief of Staff Santiago Cafiero recently admitted to Congress that it could reach 33%.
Besmedrisnik argued that first half inflation of 25.3% was “expected”, while explaining that the government is making “a very big effort to prevent (monthly inflation from going above 3.5%).
“The government uses anchors like the exchange rate, frozen utility billing and some price controls, but there are limits,” Besmedrisnik told the Noticias Argentinas news agency.
“The most likely is that [the government] will persist in these efforts until the elections, lowering inflation a bit, but doing it with forced anchors is short term and I don’t think they will be able to maintain it for many months “, did he declare.
He added that these policies “are far from being a success or a deceleration of inflation, as the Ministry of Economy says, because we are talking about a monthly inflation of 3%, which is equivalent to 46%. for the year, figures abnormal in all respects. “
Besmedrisnik said Argentina is “far from global inflationary processes, which average 10% per year, so price increases have nothing to do with international prices but with endogenous unresolved issues.”
He estimated that a successful macroeconomic policy would consist in “maintaining the level of activity and lowering inflation to 30% per annum in the short term”.
“Argentina must think beyond the elections towards a plan to normalize the economy because it is a central point to get closer to the world from which we are scandalously distant,” he said.
Last week, the Central Bank’s monthly survey of private analysts and consulting firms forecast an annual rate of 48% for 2021, down 0.3% from the previous month’s forecast.
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