Private banks predict a dollar at $ 49.83 at the end of the year and an inflation rate of 40.1%

Financial badysts projected for the end of the year a dollar to 49.83 dollars and an inflation of 40.1%. This is clear from the new study released Wednesday by the FocusEconomics Consensus Forecast LatinFocus, just four days after the primary, open, simultaneous and mandatory elections (STEP), which will take place next Sunday.

These figures are consistent with those published by the July Central Bank's Market Expectations Survey (REM), which surveyed 51 foreign consultants, financial institutions and badysts on their estimates of the dollar, inflation, Leliq rate and economic activity. This work predicts a dollar at 50 and 40% inflation by the end of the year.

According to the LatinFocus study, the economy "seems to be significantly improved in the second quarter, after the fall in domestic demand has resulted in a contraction of GDP in the first quarter."

The report says that "the economy first developed in May, supported by a strong agricultural sector," adding that "consumer confidence rebounded in the second quarter, while the trade balance remained surplus during the quarter. "

"Another positive news, on July 12, the IMF approved a fourth revision of the standby credit agreement, praising the country's excessive respect for the criteria of the agreement and authorizing the disbursement of $ 5.4 billion additional dollars, "he added. .

The study pointed out that the economy should "remain in recession this year as high inflation, high borrowing costs and a reduction in public investment weigh on domestic demand".

"Strong agricultural output should support the external sector, while improving fiscal indicators bodes well for investor sentiment.The political uncertainty prevailing before the October elections blurs the table. ", did he declare.

In this sense, badysts at LatinFocus Consensus Forecast estimate that the economy will contract by 1.5% in 2019, representing a 0.1 percentage point drop from last month's estimate before an expansion of 2.1% in 2020.

Inflation fell in June for the first time this year (June: 55.8%, May: 57.3%), while monthly price increases slowed for the third consecutive month.

Inflation is expected to decrease thanks to the strict monetary policy stance and the reduction in exchange rate effects.

FocusEconomics panel members expect inflation to end at 40.1% in 2019 and 27.7% in 2020

At its July 22 meeting, the Central Bank (BCRA) temporarily adopted a two-month average compliance badessment for the monetary base objective of adjusting the policy framework to the volatility of money demand.

In addition, it raised the floor by 58.0% for the LELIQ rate to inflation. The data are published on August 15th, once the results of the STEP are known.

Despite the expected flexibility, the policy will remain restrictive this year. Analysts at FocusEconomics see the LELIQ rate end in 2019 at 52.51%, thanks to adjusted monetary conditions, and in 2020 to 34.72%. On August 2, the Argentine peso traded at $ 44.64 per dollar, a depreciation of 5.8% from the same day in July.

The peso weakened in the IMF's revised downward growth outlook for the region; on the new tariffs announced by Trump on Chinese imports; in the middle of the Fed's "aggressive cut"; and the degradation of Moody's perspective.

According to projections, The peso will weaken in the future, due to still high inflation. Analysts estimate that the Argentine peso will end in 2019 and 2020 at 49.83 dollars the dollar and 60.65 dollars the dollar, respectively.

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