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the important forecast of a multinational bank for Argentina


A multinational bank considered that “a new stage is approaching” for Argentina, in which a “course correction and stabilization” of the economy could be defined.

“The main challenge for the Government continues to be how to maintain social and political support for a stabilization plan that depends on a significant fiscal adjustment and implies a major recession“said HSBC bank in a report.

Furthermore, he projected that the 2024 inflation will reach 210%, while the official exchange rate will close the year at $1,600.

Finally, HSBC predicted that GDP will fall 2% in 2024, a decline concentrated mainly in the first half.

The political leg: reading about the government of Javier Milei

For the international financial entity, the “reformist drive” of President Javier Milei “got stuck in Congress and the Judiciary.”

For this reason, he evaluated that the first stage of the Government was characterized by attempts at reforms that had “uneven success.”

For example, he cited the legislative treatment of the Omnibus Lawwhich he called “a major defeat, even after stripping the project of much of its content.”

He also recalled some reforms sought through decrees of necessity and urgency, such as labor reforms: “some of them have been suspended or revoked by the Judiciary”said the bank.

Now, HSBC predicted that “a new stage is approaching” for the Government, which will be characterized by the unification of the exchange market, continuing to accumulate reserves and normalizing the payment of imports.

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HSBC assessed that the first stage of the Government was characterized by reform attempts that had “uneven success.”

At the monetary and exchange level, he expressed that “the authorities will have to find a balance between the use of the currency as an anchor for inflation and the need to accumulate foreign exchange reserves.

In that sense, he recalled that the Executive Branch and the IMF agreed on a transition to a new monetary policy framework by the end of April.

“He The pace of disinflation will be key to programming changes in exchange rate policy“, he evaluated.

On the other hand, the report hoped that “at some point, the national government will meet with the provincial governors to agree to tax changes that can increase the income that the national administration partially distributes to the provinces”.





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