ARGENTINA – Central Bank Survey: postponed disinflation leads to expectation of higher interest rate

Inflation expectations for 2017, measured by the national index, increased by 0.4%, to 22.0%.

The latest survey of expectations in Argentina showed that analysts revised their inflation forecasts upward again for this year and next. While survey participants still forecast a reduction in interest rates, the expectation is now for a more gradual pace and a higher level for the reference rate by year-end 2017. The analysts kept unchanged their growth forecasts for this year and 2018.

Inflation expectations for 2017, measured by the national index, increased by 0.4%, to 22.0%, probably due to recent adjustments in regulated prices and the exchange rate weakening. The CPI for July will come out next week, and it is expected to post a 2% month-over-month gain (up from 1.2% in June). Our forecast by year-end also stands at 22%, above the target set by the central bank (12%-17%).

Fuente: ITAU

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