On Wednesday, June 14, INDEC released the inflation data for last month, with the monthly variation being 7.8% and the year-on-year of 114.2%. This last data reflected a slowdown compared to the figure reported the previous month, which was around 8.4%.
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Nonetheless, this month, the categories that showed the greatest increases were “Housing, Water, electricity and gas” and “Restaurants and Hotels” having recorded increases in 11.9% and 9.3% respectively. Thus, in the first five months of the year, accumulated inflation is already at 42.2%, giving evidence of the complex dynamics in which the economy finds itself.
Besides, in year-on-year terms, we are facing the highest level since 1991, just as the country was beginning to recover from a hyperinflationary crisis.
What do REM analysts forecast?
in that linefuture prospects also show signs that inflation will continue with high values. According to the forecasts of the Survey of Market Expectations (REM) of the BCRA for 2023, there was a upward adjustment of inflation expectations, with a correction of 21.9 pp, going from 127% to 148.9%, which would mean that it would be two continuous years with an iInflation well above the 100% barrier.
In turn, the analysts consulted by the REM also recognized a strong increase in estimated inflation for the next 12 months, estimating that inflation will rise at the impressive rate of 171% year-on-year, data that exceeds 24.6 percentage points. to what was forecast in the REM last month.
Therefore, going forward, the forecasts are still not positive as expectations are not anchored, and that certain monetary policies such as the increase in interest-bearing liabilities of the BCRA will not help for this to happen either.
What should you invest in?
before this complex picture, where having pesos without investing generates losses of purchasing power of great magnitude, We consider that position yourself in CER assets and in some fixed rate assetsa represent the best option to protect value against inflation.
Next, we are going to present some alternatives that we believe can be useful to boost your savings, At the same time, they also allow you to protect your capital against rising prices in the Argentine economy.
1) First of all, thinking about him short term, we suggest investing in Bill of the national Treasury X18L3 that adjusts its capital by the CER, thus managing to accompany inflation.
This letter with maturity in July 2023 (32 days) to date has an estimated annual yield of 149%.
For every $1,000 invested, it would pay an estimated $1,083 at maturity, in line with expected inflation.
2) Secondwe believe that it would be ideal to add to the portfolio the fixed rate bond, TO23, maturing in October 2023 (123 days) and with an IRR of 152%.
This way, for every $1,000 invested, it would pay an estimated $1,364 at maturity Although it is a fixed rate, it would beat expected inflation for the next four months.
While, finally, and thinking in the long term, we consider that it is a good idea to have a position in the CER bond TX26.
This bond, which adjusts its principal for inflation, and also pays coupons semi-annually at an annual rate of 2%. Although it matures in November 2026, it has made principal payments since November 2024 and we expect it to beat inflation by several points over four years.
Currently, it has an estimated annual yield of CER+12,5%.
* Head of Research de Invertir Online