One of the largest banks in the United States projected that, after the period of stagflation expected for this year, The Argentine economy will emerge strongly in 2025.
The team of experts at JP Morgan predicted that this year’s level of activity will fall 3.6% and that the retail prices will grow 200%just below the 211% of 2023, but with a strong adjustment in relative prices.
Only by 2025 will Javier Milei’s government be able to record two good news items simultaneously, according to Morgan: an inflation of 40% and a GDP rebound of 5.2%.
The estimates are more optimistic than those of the market average, which foresee economic growth of 3-4 percent and inflation close to 60% next yearaccording to the latest survey of expectations published by the Central Bankl.
Furthermore, the Morgan analyst team projected that the fiscal deficit will be 1.7% of GDP this year and 0.7% in 2025with more conservative calculations than those promised by the Government, aimed at achieving balance in public accounts at the end of this year.
In terms of external debt, the North American bank’s analysis team estimated that it will reach 64% of GDP this year and will drop to 57% next, while the Central Bank’s reserves will rise to US$22.4 billion and US$27.4 billion, respectively.
The report is not the only one that reflects Wall Street’s growing optimism about Argentine accounts, since Morgan Stanley predicted that inflation will fall to 31% next year, in the most optimistic estimate of the entire international market so far.
Foreign investors and analysts who passed through Buenos Aires in recent weeks left behind their skepticism about the depth of the reforms promised by Milei in the electoral campaign, when they were surprised by the fiscal surplus recorded in the first two months of the year.
Inflation: “We avoid hyper” insists Milei
Inflation marked a 25% increase in December, 20% in January, 13% in February and in March private measurements are around 11 and 13 percent.
It is expected that Indec’s consumer price index (CPI) could reach single digits between April and May, depending on the progress of the schedule for increasing public service rates.
Milei indicated that, if the rate increase were discounted, inflation would run at single digits per month. “The greatest achievement is having avoided hyperinflation”stated the President in statements to the CNN en Español channel.
“We planned to reach zero deficit for the full year 2024 and we did so with such force that we achieved it in the first month of the year. That meant cutting off the monetary issue.”he explained.
He insisted that March is “a difficult month, very difficult due to the issue of seasonality, but at some point the inflation rate is going to collapse in the same way that the dollar collapsed.”
With information from Argentine News