Itaú BBA - Macro Scenario – Argentina: Ghosts still linger

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Macro Scenario – Argentina: Ghosts still linger

January 14, 2021

Higher soy prices unlikely to help an unbalanced economy

For the version with all charts and tables, please open the attached pdf file

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The government has extended utility rates’ freezes and has introduced further controls in response to higher inflation, casting doubt over the size and pace of the needed fiscal consolidation as midterm elections approach this year. An IMF program is also at risk.

• High inflation expectations and a wide spread in the parallel FX markets may jeopardize the recent stability the official FX market gained through tougher controls on dollar purchases.

• Despite the recent increase in soy prices, the recovery will likely be weak, reflecting policy uncertainty and exchange-rate controls. We forecast GDP growth of 4.5% this year and 50% inflation, up from a contraction of 10.5% estimated for 2020 and a 37% increase in consumer prices. 

Joao Pedro Resende
Juan Carlos Barboza
Diego Ciongo


For the version with all charts and tables, please open the attached pdf file



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