BBVA Research: Argentina Economic Outlook. March 2024

Tendencias en la Economía Argentina

Post available in: English Español

Javier Milei’s government took office aiming to have a less regulated and more market-friendly economy with the private sector as the main driver of economic growth. The core of his macroeconomic policy is to achieve fiscal equilibrium and eliminate monetary issuance to cover public spending as of 2024.

Key points

  • The new Administration has started correcting relative prices. The FX rate rose 120% in Dec-23 and has been moving at a 2% MoM pace since then. Regulated prices, such as transport and utilities, are also being adjusted. Monthly inflation will remain high during the first half of the year due to these adjustments, and we expect it to accumulate by 175% in 2024.
  • Economic activity has been falling since 4Q23, and we expect it to remain in negative territory during 1H24, as it captures the recessionary effects of the price corrections and the inflationary acceleration. We project a GDP rebound from 2H24, averaging a 4% decline this year.
  • 2024 started with a fiscal surplus in January, while no money to assist the Treasury has been issued on a net basis so far this year. However, the adjustment in spending was mostly due to a fall in social assistance, pensions, and salaries compared to inflation, which will require additional measures to make this path sustainable. We project a primary fiscal deficit of 0.8% of GDP for 2024.
  • Once this stage of price corrections and the Central Bank’s balance sheet clean-up is over, we expect the launch of an economic program focused on disinflation, with an initial acceleration of the exchange rate devaluation accompanied by an increase in interest rates, to turn them positive in real terms during 2H24.

Source: BBVA Research

(Visited 26 times, 1 visits today)

About Gateway to South America

Established in 2006, Gateway to South America began as a single office in Buenos Aires. Since then, it has grown into a vibrant regional network, providing professional real estate marketing services to clients in Argentina, Brazil, Chile, Paraguay, Peru, and Uruguay. If you enjoy reading our news site, please share it on your social media!

Want an edge on investing in Latin America? Get our Investment News first: Join 39,400 subscribers without cost to our English, Spanish or Portuguese posts for the latest real estate news in LATAM useful for new and experienced investors. Please note, this subscription is for Investment News only, not properties for sale.

Post available in: English Español


Make a comment on this post

Your email address will not be published. Required fields are marked *

Real Estate and Investment News from South America
Visit us on LinkedInVisit us on FacebookVisit us on TwitterVisit us on Pinterest