Economy Morgan Stanley Predicts 2025 Inflation rate in Argentina will be 31%

[Ron]

Milei is doing a good job. This shows how important his economic measures regarding fiscal adjustment have been. Finally, the sacrifices made by the Argentine people to endure this adjustment will pay off. Morgan Stanley predicted that inflation will be 207% this year and will drop sharply to 31% next year (compared to the 210% and 58% estimated in the latest market expectations survey (REM) published by the Central Bank).

Un gigante de Wall Street estimó un derrumbe de la inflación argentina y sorprendió a todos: qué cifra calculó para 2025

El banco de inversión Morgan Stanley analizó la situación macroeconómica de la Argentina y las oportunidades de inversión en términos financieros y reales

www.infobae.com

 

[Betsy Ross]

Wow that's a big reduction in the estimate for next year. That would be amazing if it was only 31% inflation next year!

 

[legend]

Even Caputo is talking about it. The prediction for July is that it will be the lowest of the year so far.

Luis Caputo: “Julio va a tener la inflación más baja en lo que va del año”

El ministro de Economía lo dijo en una reunión con ejecutivos de sociedades de bolsa. Así, dejó entender que el IPC de este mes será más bajo que el 4,2% de mayo

www.infobae.com

 

[Uncle Wong]

Even the Argentineans that I know that do not support Milei are amazed that inflation is falling this quickly. And grateful for it. It is strange talking to some of these anti-Milei people. It's like part of them is angry that he is improving things. I am not sure what it will take for them to admit they are wrong. I'm not entirely sure is any point when they will admit they were wrong.

 

[Tim Joe]

Even the Argentineans that I know that do not support Milei are amazed that inflation is falling this quickly. And grateful for it. It is strange talking to some of these anti-Milei people. It's like part of them is angry that he is improving things. I am not sure what it will take for them to admit they are wrong. I'm not entirely sure is any point when they will admit they were wrong.

Very true. I have friends there who are Peronists and I talk about all the progress being made and they quickly try to change the subject and talk about the deep recession. It's like they won't admit any positive things going on there. I am not sure how any reasonable person can't admit that things are improving there. Taking inflation from 300% down is quite an accomplishment.

 

[Finance Prof]

This would be a wonderful thing. Unfortunately it is very difficult to predict a year ahead of time what will happen in Argentina. I take anything a foreign company says with a grain of salt.

 

[CraigM]

This would be a wonderful thing. Unfortunately it is very difficult to predict a year ahead of time what will happen in Argentina. I take anything a foreign company says with a grain of salt.

Indeed, economic forecasts are always grain-of-salt but predicting inflation in Argentina a year from now is kind of comical.

 

[TonyTigre]

Forecasts are never guaranteed to be accurate or even close due to various unforeseen reasons. However, forecasts do have an effect on people's behavior and investment decisions. That in turn has an effect on future inflation rate. Consider what would happen if they had forecasted 310% inflation rate for 2025 instead of 31%.
I personally would not put a different weight on a forecast done by a foreign company vs. a domestic entity. One can argue that a foreign company might be less biased but a domestic one might have more local knowledge. However, who knows what domestic experts were consulted by the foreign company, and how much bias is reflected in a domestic forecast. So, I think everyone can agree that all forecasts should be taken with a grain of salt, regardless of who did the forecast.

The most important thing is the relative change in the inflation rate forecast over a number of months. That will help solidify the inflation rate trend more and encourage finalizing spending and investment decisions.

Those who didn't expect inflation to drop this fast probably also didn't expect Milei would stick to those brutal cuts thinking there would be out of control protests and riots, and his approval rating would drop like a rock, forcing him to change course or be kicked out of office by the mob. We should give his administration a lot of credit for balancing that very well so far through various mitigation efforts.

Also keep in mind that if Milei were to change in the ways even some of his supporters suggested, he wouldn't be who he is, and probably won't make the difficult decisions required.

 

[Uncle Wong]

Forecasts are never guaranteed to be accurate or even close due to various unforeseen reasons. However, forecasts do have an effect on people's behavior and investment decisions. That in turn has an effect on future inflation rate. Consider what would happen if they had forecasted 310% inflation rate for 2025 instead of 31%.
I personally would not put a different weight on a forecast done by a foreign company vs. a domestic entity. One can argue that a foreign company might be less biased but a domestic one might have more local knowledge. However, who knows what domestic experts were consulted by the foreign company, and how much bias is reflected in a domestic forecast. So, I think everyone can agree that all forecasts should be taken with a grain of salt, regardless of who did the forecast.

The most important thing is the relative change in the inflation rate forecast over a number of months. That will help solidify the inflation rate trend more and encourage finalizing spending and investment decisions.

Those who didn't expect inflation to drop this fast probably also didn't expect Milei would stick to those brutal cuts thinking there would be out of control protests and riots, and his approval rating would drop like a rock, forcing him to change course or be kicked out of office by the mob. We should give his administration a lot of credit for balancing that very well so far through various mitigation efforts.

Also keep in mind that if Milei were to change in the ways even some of his supporters suggested, he wouldn't be who he is, and probably won't make the difficult decisions required.

Definitely forecasts of lower inflation are better than higher inflation! What I noticed in many articles and even posts on X is that it doesn't seem like the people writing them have even ever visited Argentina or even know the difference between white and blue rate. But Morgan Stanley I would take to heart.

 

[Betsy Ross]

Very true. I have friends there who are Peronists and I talk about all the progress being made and they quickly try to change the subject and talk about the deep recession. It's like they won't admit any positive things going on there. I am not sure how any reasonable person can't admit that things are improving there. Taking inflation from 300% down is quite an accomplishment.

These people will never admit progress and always complain about something. Even now I know people that keep trying to downplay the tremendous decrease in inflation. They will admit it is better but then talk about something else. I try to explain that under Massa we would be in a horrible situation but they don't listen to reality.

 

[Billy Goat]

Forecasts are never guaranteed to be accurate or even close due to various unforeseen reasons. However, forecasts do have an effect on people's behavior and investment decisions. That in turn has an effect on future inflation rate. Consider what would happen if they had forecasted 310% inflation rate for 2025 instead of 31%.
I personally would not put a different weight on a forecast done by a foreign company vs. a domestic entity. One can argue that a foreign company might be less biased but a domestic one might have more local knowledge. However, who knows what domestic experts were consulted by the foreign company, and how much bias is reflected in a domestic forecast. So, I think everyone can agree that all forecasts should be taken with a grain of salt, regardless of who did the forecast.

The most important thing is the relative change in the inflation rate forecast over a number of months. That will help solidify the inflation rate trend more and encourage finalizing spending and investment decisions.

Those who didn't expect inflation to drop this fast probably also didn't expect Milei would stick to those brutal cuts thinking there would be out of control protests and riots, and his approval rating would drop like a rock, forcing him to change course or be kicked out of office by the mob. We should give his administration a lot of credit for balancing that very well so far through various mitigation efforts.

Also keep in mind that if Milei were to change in the ways even some of his supporters suggested, he wouldn't be who he is, and probably won't make the difficult decisions required.

Very good points. One thing for sure that even the Peronistas can't argue with is core inflation is going down.


It was 2.8% for July. This is a great trend.