Argentina inflation to reach 47% in 2021

Argentina’s monthly inflation in April 2021 is expected to be around 3.8%, according to firms consulted by the Central Bank. Should projections hold true, inflation for 2021 would be around 47.3%. All other South American countries, except for Venezuela, can measure their annual inflation rate in single digits.

The Market Expectations Survey (REM) carried out in the last days of April adjusted upwards the increase in the cost of living. An official exchange rate of AR$ 112.64 per dollar is also expected in December 2021 and AR$ 159.09 per dollar at the end of 2022. The exchange rate on Friday was US$ 1 = AR$ 93.56, while in the tourism market, one dollar is equivalent to 145 Argentine pesos.

This year’s Gross Domestic Product (GDP) is expected to grow 6.4%, 0.2 percentage points below the previous REM projections, but still well above the year-on-year decline of 9.9% recorded in 2020.

Analysts also estimate that monthly inflation is likely to slow after April, due to a projected -1.5% contraction for the second quarter of 2021.

“There is a tendency for a slight increase in monthly projections and until the end of the year, raising the level of the rate (of interest) to 35%”, highlighted the REM.

The last segment of the REM predicts that FOB exports in 2021 will be US$ 63,725 million, US$ 1,298 million above the previous projection and US$ 8,841 million above the US$ 54,884 million in 2020.

On the other hand, imports for the year 2021 would be in the order of US$ 50.4 billion, equivalent to US$ 1,176 million above the previous REM forecast and US$ 8,046 million above last year’s US$ 42,354 million.

Meanwhile, there was no change in unemployment for the first quarter of 2021 (11.2%), compared to the previous REM, but it is expected to increase to 11.7% in the second quarter of 2021 and then drop to 11.1 % in the third quarter and then falling again to 11% in the last quarter of the year.

Source: MercoPress

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