Graphic: Argentina’s untrustworthy macro budget forecasts

26th September 2019

By The Essential Staff

Graphic: Argentina’s untrustworthy macro budget forecasts

The budget presented last week by the government is unlikely to see a quick Congressional approval. Just like with the bill to re-negotiate bonds issued under Argentine law, the opposition suggested that it will wait until the election is over before entering into discussions.

Despite this, the Economy Ministry’s projections on growth, inflation and the peso-to-the-dollar exchange rate within the budget have caught the headlines. Recent history, however, shows these figures have always been overtly optimistic.

</p> <img class="wp-image-3975 aligncenter" src="" alt="Forecasted and actual inflation between 2013 and 2020 in Argentina" width="600" height="350" srcset=" 300w, 768w, 1024w, 600w" sizes="(max-width: 600px) 100vw, 600px" /> <p>As the graphic shows, the history of misses has been consistent across different administrations. In fact, what&#8217;s actually hard to find is a hit, or even an overtly-pessimistic projection. 2017 was the closest to a correct prediction, but even then all three outcomes weren&#8217;t as good as projected, in what ended up being the most successful year in Macri&#8217;s administration by far.</p> <p>Before that, the Kirchnerite insistence on intervening the INDEC statistics bureau to put out fake inflation figures meant every budget prediction was a bit farcical from the beginning (the projections were almost exactly on the mark by end of year when compared to INDEC&#8217;s cooked up numbers, but far from every other independent study).</p> <p>In the years since the 2018 debt crisis, <em>Cambiemos</em>&#8216; stubbornly optimistic discourse about the possibility of a bounce back meant misses of as much as 100% in some of the projections. (Although 2019 hasn&#8217;t ended, the final figures for the year used in the chart are based on the Central Bank&#8217;s REM reports, which are based on an average of a group of consultancy agencies&#8217; projections)</p> <p>Will the trend change in 2020? With the <a href="">black-market dollar</a> already near the projected 2020 average of 67 pesos as the time of this writing, and most analysts already fearing a big recession next year (as opposed to the 1% growth estimated), the smart money seems to be on &#8220;no&#8221;.</p> <p>

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The Essential Staff

The Essential is a premium subscription-based news platform that brings you high quality journalism and in-depth coverage in English about the changing face of Argentina’s politics and economy.