They believe that the year will end with the highest inflation since 1991

For the market, it will end at 47.5%; in October, it would have increased by 5.1% before starting to fall; the dollar would be at $ 39.30 by the end of December

According to the market, the monetary and exchange rate stabilization plan launched by the government a month ago will not prevent the country from recording the highest exchange rate.

l & # 39; inflation
the last 28 years, but it will at least serve to lower the rate of price indexation in the coming months.

The conclusion comes from the Market Expectations Survey (MER), a systematic follow-up of key short- and medium-term macroeconomic forecasts from local and foreign sources, which collects monthly

central bank
(BCRA), this time from October 29 to 31 and received the advice of 55 consultants; research centers, banks and foreign analysts.

It appears from the bond that the market expects 2018 to end up with a general inflation rate of 47.5% (2.7 points higher than what was projected there a month ago), which should reach 48% in its main measure. This will double the 2017 rate (reaching 24.6%) and will reach the highest rate since 1991 (84%), exceeding the 2002 mark (40.9%) and the first year of the Macri mandate (40.3%). ).

Meanwhile, analysts have recalculated their inflation forecasts for the next 12 months (from 31.9% to 30.6%) and for the next 24 months (from 20.3% to 20.1%). 39, one year on the other). ), although they have raised their end-to-end forecasts for 2019 from 27 to 27.8%, in part because they maintain a high inflation outlook (monthly average of 2.5 %) for the first quarter of the year.

Much of this prediction is based on the assumption that the currency adjustment plan and the exchange rate bands will stabilize the exchange rate, which they are now considering closing. 39, year at 39.30 dollars against 43 dollars until then projected. a month.

This would imply a further devaluation of the peso by 5.8% from the average it was quoted in October, with a rise in the dollar closing the year at 121.8%. Imagine that the dollar will end in 2019 at $ 48.90, which is an advance of 24.6% over the next year, 3.2 percentage points below inflation.

Revalorize the costs of the crisis

The exchange stabilization projection includes the expectation, at the same time, of a slow reduction in the economy's benchmark rates, which reached 73.5% in mid-October, but fell to around 68% in mid-October. new

EMN participants calculated an average rate for liquidity letters (Leliq) for November, which remains stable at 68% per annum before falling back to 65% in December. They then expect a further decline that would gradually bring them back to 55% in March, before reaching 35% in December 2019.

With regard to the impact of the crisis on the economy, the market is expecting 2018 to end with a contraction of 2.4% of GDP, a level slightly lower than that he had imagined in September (-2.5%), that it would cost to recover – although they expect that activity could stabilize in the first quarter of 2019 ( variation of 0%), whenever another 1% would fall again next year. In this respect, the light at the end of the tunnel only appears in 2020, when the economy finally managed to rebound by 2.4%.

In fiscal matters, EMN respondents expect the year to end with a primary deficit of $ 358 billion (a little less than the $ 360,000 estimated at the end of the year). previous survey) and provide for a greater step-down than the budget balance would allow in 2019, as provided for in the national budget and in the pact with the IMF.

The dollar falls and gets closer to the lower band

• The retail dollar closed yesterday at $ 36.60 for the sale and ended the week with a low of $ 1.24 or 3.27%. At Banco Nacion, the currency ended at $ 36.40, or $ 1.40 less than last Friday's closing.
• The wholesale dollar finished at $ 35.49, about 18 cents lower than the day before yesterday and $ 1.35, down 3.66% on weekdays. With the values ​​reached this week, the dollar rallied to the end of August levels, before the jump that brought it to the record highs after convertibility.
• The currency was closer to the lower end of the non-intervention range defined by the BCRA, which since this month starts at the base of $ 35.02 with daily updates at a rate of 3% per month. The BCRA has issued 7-day liquidity letters in the amount of 139,380 million COP, at a rate of 68.51%.