Analysts in Argentina forecasted lower inflation for 2025 at 23.2%, down 2.7 points, and slightly increased the growth outlook to 4.6%. This comes amidst ongoing austerity measures under President Milei. Latest central bank actions reflect a strategic response to reducing inflation and improving economic conditions. Significant inflation data is expected soon from INDEC.
Analysts in Argentina have slightly lowered their inflation forecast for 2025, predicting an annual rate of 23.2%, which is 2.7 percentage points less than last month’s estimate. For January, expected monthly price increases are 2.3%. Additionally, economic growth predictions have been adjusted upward by 0.1 percentage points, now forecasting a 4.6% increase by the end of 2025.
This survey was completed between January 29 and January 31 and included responses from 39 varied participants, such as consultancies and financial institutions. Argentina has been experiencing a notable decline in inflation from nearly 290% in April last year to around 118% in December, although it remains in the triple-digit range.
Under the leadership of President Javier Milei, who took office in December 2023, the country has undergone stringent austerity measures, leading to budget cuts and a steady decrease in inflation rates. However, the recent austerity has exacerbated poverty, which has risen above 50% in early 2024.
The central bank recently reduced its benchmark interest rate from 32% to 29%, attributing this move to the positive trend in inflation. The INDEC statistics agency is expected to release the inflation data for January on February 13, and the economic performance figures for Q4 2024 on March 19.
Argentina’s economy has been marred by high inflation rates and economic instability, especially notable in the drastic decrease from a peak of 290% inflation in April 2023. The current situation reflects ongoing efforts to stabilize the economy through austerity measures implemented by the government to mitigate inflation while facing rising poverty levels. The economic environment is still unpredictable, prompting continuous assessments and adjustments of inflation and growth forecasts by analysts.
In summary, Argentine analysts have projected a reduction in inflation expectations to 23.2% for 2025 and a slight increase in anticipated economic growth to 4.6%. Supported by a recent reduction in the benchmark interest rate, these adjustments signal a cautious optimism in the face of past inflationary crises and present economic challenges, including high poverty rates.
Original Source: www.marketscreener.com
