Experts informed Argentina’s Central Bank that the predicted 2023 inflation rate is now 169.3%, a 28.6-point jump from earlier estimates.
The bank released these new numbers in a recent report.
The experts gave their inflation outlook for the first time since August 14. On that day, the Central Bank hiked the main interest rate to 118%.
The Argentine peso had fallen 22%. These experts predict a 12% inflation rate for September. In August, the rate was 12.4%.
They also expect the country’s GDP to drop by 3% this year. A severe drought in early 2023 is the main reason.
The bank’s report stated that the drought heavily impacted the second quarter.
For 2024, these analysts see a further 0.6% drop in GDP.
They also looked at unemployment. The jobless rate was 7.2% in the second quarter. This figure didn’t change from the last survey.
On the topic of currency, experts expect 350 Argentine pesos per dollar until October. After that, they see it jumping to 738 pesos per dollar by February.
This would be a 110% increase.
Background
Argentina has a history of struggling with high inflation rates. During the 1980s, hyperinflation even reached an annual rate of 2000%.
In recent years, inflation has remained a key issue for the nation. Despite various strategies, such as interest rate hikes, the problem persists.
The Central Bank’s frequent changes to interest rates reflect this struggle. High inflation rates create several issues.
They reduce the purchasing power of the public. This leads to social unrest and impacts the overall economy. A high inflation rate also scares off foreign investors.
Unemployment is another key issue in Argentina. The rate has hovered around 7% for a while now.
While this is not extremely high, it adds to the nation’s economic woes.
The fluctuating peso makes matters worse. A weaker peso pushes up the cost of imports. This, in turn, adds to inflation.
The expected future increase in the exchange rate could exacerbate these problems.
More: Argentina news in English, every day from The Rio Times.
This article was produced by The Rio Times’ automated newsroom system. How we use AI · Report an error · Editorial responsibility: Matthias Camenzind, Editor-in-Chief
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