Argentina and Brazil will have a low level of growth in 2022 Y I know become more expensive in dollar termsaccording to the last Situation Monitor published by the Catholic University (UCU).
The report indicates that these conclusions emerge from the latest survey of expectations carried out by the central banks of neighboring countries: the Survey of Macroeconomic Expectations (REM), of the Argentine and the Market Report Focus, from the Brazilian. In the case of Argentina, the survey, which has a monthly frequency, was published on Friday the 6th and in the case of Brazil, which is weekly, on Monday the 2nd.
According to the situation monitor of the UCU, in Argentina the economy would grow 3.5% this year (that is, between the averages of 2021 and 2022), which implies a somewhat lower magnitude than the “statistical drag” inherited from last year (4.1%). In other words, it would not grow throughout the current year.
for inflation a rate of 65.1% is projected, higher than last year (50.9%), but month by month expectations are corrected upwards. Finally, it is expected that official dollar closed the year at AR$ 155, with a variation lower than that of prices. In this way Argentina would be more expensive in dollars and much more would when considering the Dolar blue” that today presents a gap of the order of 70% with the officer, gap that at the end of last year was close to 100%.
UCU
In the case of BrazilIt is expected that the economy grows 0.7%, just above the “drag” from 2021 (0.3%), so this year’s “own” growth would be close to zero. The expected inflation stands at 7.9% what a magnitude less than the current (11.3% in the 12 months to March), which has not yet subsided despite the significant tightening of monetary policy. By last, is projected to the dollar at BR$ 5.00, giving rise to considerable inflation in dollar terms.
The report notes that both countries present problems in their macroeconomies and also have uncertainties on the political front. In Brazil there will be elections this year and, according to the polls, the chances of President Jair Bolsonaro and former President Lula da Silva have been matched. In Argentina, meanwhile, there is a fight within the governing coalition, between the president and the vice president.
In turn, the monitor indicates that neighboring countries present different approaches to economic policywith Brazil managing within orthodoxy and with Argentina doing the opposite, “in a new revival of errors and bad policies that have been committed in real repetition in recent decades.” This despite having a recent agreement with the International Monetary Fund (IMF) that was made, by both parties, with resignation and to “hold out” until the next change of government.
