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What do the city’s gurus expect in the coming months?


The city ​​gurus Buenos Aires renewed their forecasts for key variables when making investment or savings decisions, such as the projection of the dollar and the inflation by 2024. However, the fact that the Government suffered a resounding failure with the so-called omnibus law does not rule out the possibility of a crash.

The REM analysts spread by the Central Bank (BCRA) forecast the nominal exchange rate at $839.7 per dollar for the February average 2024 (-$30.4 per dollar compared to the previous REM). For December, the official exchange rate is expected to rise to $1,700.60.

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On his part for March The exchange rate would be, according to the analysts consulted, at $995.4, which implies $18.8 less than the previous measurement. For April, also corrected downwards, $8 than the previous REM to the $1,100 level. It just rises in May $21.8 to $1,186.6.

The Survey of Market Expectations (REM) was held between January 29 and 31 among 37 participants that included consulting firms, financial entities and local and international research centers.

Inflation: what the market thinks will happen

The analysts consulted raised their inflation estimate for Argentina for 2024 to 227% from the previously estimated 213%. The measurement took place after Javier Milei took power in December.

The experts consulted by the central bank expect inflation of 21.9% monthly in January -whose official figure will be announced in the coming days-, which would begin to decline moderately in February, to 18% monthly. The number would be in line with what reported by the City, which recorded 21.7%.

The country closed 2023 with an accumulated annual inflation of 211%, according to the Government.

Uncertainty in the markets after the fall of the omnibus law

After the defeat of the Government in the treatment of an ambitious law called omnibus in Congress, the markets reacted downward due to doubts about the implementation of its plan to reverse the current economic crisis.

The ruling party is considering resubmitting the project or splitting it into separate bills following the lower house’s rejection of several crucial proposals, a ruling party lawmaker said.

For his part, the Minister of Economy, Luis Caputo, He said in statements to LN+ that “what happened yesterday is not dramatic. It is not a big problem” and stated that “the law is for all Argentines, it is to deregulate, (…) it is so that the sector can develop private”.

Milei assumed the presidency last December with the promise of dollarizing the economy, ending inflation of more than 200% annually, eliminating the central bank and cutting privileges to what he calls ‘the caste’.

The proposal that was rejected covered reforms in more than 300 regulations and allowed the privatization of public companies and granted special powers to the president, among other points.

“This defeat exposes the governance challenges facing the government and obstructs the ambitious plan to reduce the fiscal deficit to zero,” JP Morgan said.

“Without a clear plan for the future legislative agenda, we believe that this setback will increase political uncertainty and affect the exchange rate gap in the short term, which will have an effect on Argentine stocks and ADRs,” he estimated.

After opening with losses of more than 5%, the Merval stock index recovered due to opportunity purchases and cut its fall to 2.14% by midday.

For their part, over-the-counter bonds lost an average of 1.2% in a market without genuine takers given the uncertainties about the economic future of the third largest economy in Latin America.

“We believe that market pressure could push the government to demonstrate that it has a way forward with a revised fiscal package sooner rather than later,” Barclays estimated in a report.

If the ruling party “focuses on promoting the rest of the general bill instead of prioritizing the fiscal package, we believe that the risks to a successful trajectory of stabilization could increase,” he said.

In the exchange market, the interbank peso remained with a ‘crawling peg’ of 2% monthly, compared to a predicted inflation of 20% for January, trading at 830.20 units per dollar.

Businesses in the alternative exchange markets were operating at a low of 1,287.50 in the ‘cash with settlement’ stock market -CCL- and 1,175 units for sale in the benchmark marginal or ‘blue’ market.

“The evolution of the CCL will be mainly influenced by what happens in Congress in relation to the Bases Law,” said Investments’ personal portfolio.

“We expect tension in the financial dollar until political uncertainty does not diminish. To what extent? With the October 2023 “panic” price of 1,914 in today’s pesos being very far away, we see room for the rise, but not a runaway dollar “, he pointed.





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