Argentina inflation seen rising slightly this year

BUENOS AIRES Reuters analysts consulted by Argentina expect surging consumer prices to rise slightly this year, the bank said on Friday, which would be the second consecutive year of near triple-digit inflation for South America's second-biggest economy.

According to a poll commissioned by the Argentine monetary authority BCRA, consumer prices are going to increase by an annual rate of 97.6% in 2023, compared to last year's rate of 94.8%.

According to a budget projection, the government of embattled President Alberto Fernandez believes that the annual inflation for 2023 will be much lower, at just 60%.

The inflation forecast sees some relief by the year 2024, with prices rising by 79.6%, but up from its previous estimate of 75%.

Argentines live in a world with one of the world's highest inflation rates, second only to Venezuela in Latin America because of a prolonged economic crisis, chronic deficit spending and the steady erosion of the local peso currency.

The BCRA announced earlier this week it will roll out a new 2,000 peso bill, double the face value of its largest current bank note.

The analysts think the inflation rate for January will come in at 5.6%. The monthly rise in prices last December stood at 5.1%, according to the official IPC price index.

The expectations of economic growth this year remain unchanged at 0.5%, while the official exchange rate is expected to be 327.75 per U.S. dollar at the end of the year.

That would be a 74% weakening of the tightly controlled official exchange rate, compared to its current value of about 188 pesos per greenback.

The REM survey interviewed 40 experts from Jan. 27 - 31, including consultants, financial institutions and research centers.