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25-07-2018
A recent report from the bank indicates that the recession would be overcome in the last quarter of the year, with the resumption of agriculture
According to Argentina's status report, published yesterday by BBVA Research, Argentina would overcome the recession to last quarter this year, by which time it will be possible to start thinking of a reduction in the rate of monetary policy following a slow deceleration of inflation which would close the year in 29.6% within the bands external agreements with the IMF. They also expect the stability of the dollar for the remainder of 2018.
The study by the bank's economists also predicts that budget targets will be achieved this year and next year , for which it expects a growth of 1.5% with an improvement of the external front for less imports and favorable conditions for the export sectors. In the months to come, in the meantime, we expect to suffer from activity and employment.
"The fiscal consolidation and the progress of productivity of Argentina were too slow to ensure the sustainability of the debt in this environment, which added own policy mistakes, caused the closure of credit markets for the country, and strong tensions on the local currency market, "summarized the BBVA report.
With the volatility of trade still far from being eliminated, "it is likely that the reduction of the rate of monetary policy will only begin at the end of the third quarter, until reaching 32% by the end of 2018, without ruling out higher levels and greater volatility of Lebac rates before the new monetary policy pattern with greater tracking monetary aggregates, "said BBVA.
"We estimate that the nominal exchange rate will remain relatively stable in the second part of 2018, while in 2019 will have a variation ] lower than inflation rate ($ 32.9 in December), which in real terms will be moderately strengthened by about 3% over the next 18 months, "he said.
The bank's forecast is a contraction of activity of 2.1% in the second quarter and 0.8% in the third The year, however, would end with a growth of 0.5% thanks to a rebound at the end of the year in which the agro should be the protagonist (already a positive first quarter.) For 2019, meanwhile, it expects a growth of 1.5%.
On the side of inflation ] during this time ps, BBVA Research predicts 29.6% for this year and 21% for 2019, in the external bands of the agreement with the IMF. For this, the move to devaluation prices should be limited, mainly because of the harshness of monetary policy and the decline in activity.
On the other hand, the deficit targets of 2.7% for this year, and 1.3% for the next they seem achievable according to the economists of the bank. However, the external deficit will take time to correct itself.
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