The Survey of Market Expectations (REM) of the month of July published by the Central Bank (BCRA) project a inflation annual by the end of 2022 close to 90%a strong rise of 14.2 percentage points (pp) compared to the estimates reported in the last report.
Likewise, the follow-up published this Friday raised the forecast for inflation for 2023 up to 76.6% (an increase of 12.0 pp than in the previous REM) and projected a inflation of 60.0% by 2024 (9.8ppms).
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July was the month with the highest volatility of the year and meant a substantial rise in expectations for the medium and long term. The beginning of it coincided with the resignation of the former Minister of Economy, Martín Guzmán, and the increase in uncertainty about the future of the dynamics in the management of the Palacio de Hacienda.
The data was collected between Wednesday, July 27 and Friday, July 29.. Even so, the appointment of Sergio Massa as minister and the details of the unification of portfolios were confirmed in the middle of data collection, on Thursday afternoon.
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As for the estimates for the seventh month of 2022, the short-term figures indicate that the monthly inflation rate would have been 7.5%. The expected variations for the following months converge towards a monthly 5.1% in December 2022 and January 2023.
These readings are in line with the forecasts made by the Government, which were advanced through the Secretary for Economic Relations of the Foreign Ministry, Cecilia Todesca Bocco, that inflation “is going to be bad.” This would place it in the highest monthly index of the last 20 years0.8 percentage points above the peak registered in March of the current year.
Short-term monthly inflation projections.
The Central Bank highlights in its report that the ten analysts who best forecast this variable for the short term expect an average inflation of 94.7%which is also much higher than the estimate for the previous month, given that it increased by 15 percentage points.
As for the dollar, REM analysts corrected their projections for the nominal exchange rate and they foresee that the exchange rate will reach $167.16 per dollar in December 2022. This implies a rise for the next five months of 20%. Likewise, those who forecast this variable with greater precision with short-term horizons projected that it would be US$167.57 for each dollar.
The annual inflation expectations for 2022, 2023 and 2024.
As for the value of the exports, those who participate in the REM estimate an amount for 2022 of US$ 88,322 million, increasing by US$ 600 million in relation to the last REM. While at importswill be located at US$79,784 million, US$ 2,234 million above the forecast of the previous survey.
The top 10 forecasters projected the value of exports for the year at US$90,158 million and an average of imports of US$81,676 million.