La Derecha Diario Bank of America Predicted That the Restrictions in Argentina Would Be Lifted Earlier Than Planned.
A Wall Street report analyzed Argentina's economic future and Milei government's key measures.
A report from Bank of America analyzed the Argentine economy and projected the end of the currency controls. It also estimated the value of the official dollar in the coming months and the key measures of Javier Milei's government.
According to the analysis by the third largest investment bank on Wall Street, the government foresees reaching an agreement with the International Monetary Fund (IMF). This would allow for the acceleration of the removal of currency controls.
The report highlights Milei's promise to free the currency market on January 1, 2026. Bank of America anticipated that the unification of the exchange rate could be brought forward to December 2025.
Official dollar projections for 2025
The investment bank also projected the evolution of the official dollar after the removal of the controls. According to its report, these would be the estimated values:
- First quarter of 2025: $1,070
- Second quarter of 2025: $1,170
- Third quarter of 2025: $1,250
- Fourth quarter of 2025: $1,400
This would represent a 33% increase in the value of the official dollar throughout 2025. In terms of devaluation, it would imply a 25% loss of the Argentine peso in one year.
Reduction of the exchange rate gap
Another key point of the report is the fall in the gap between the official dollar and the blue dollar. Bank of America highlighted that the difference narrowed to 10-15%, when in 2023 it had exceeded 50%.
The report also indicated that the net reserves of the Central Bank remain at negative levels. However, the increase in energy exports and the arrival of foreign investment could improve the situation.
Inflation and monetary policy: what will happen to prices?
Inflation in Argentina showed a strong deceleration, dropping from 25% in December 2023 to 2.2% in January 2024. According to the report, this is due to aggressive fiscal adjustment and the decrease in the peso's depreciation rate.
Bank of America's inflation projections are as follows:
- 2024: 118%
- 2025: 28%
- 2026: 21%
The report also anticipated that the monetary policy rate will close 2024 at 32%, decrease to 30% in 2025, and to 25% in 2026.
Economic growth
The bank projected a 1.9% contraction of GDP in 2024, but expects a 5% recovery in 2025. Growth would be driven by the energy sector, foreign investment, and improved bank credit.
The GDP estimates for the coming years are:
2024: 2% decline
2025: 4.5% growth
2026: 3.3% growth
Fiscal surplus and external financing
Bank of America highlighted that Milei's government achieved a primary fiscal surplus of 0.3% of GDP in 2024, despite the recession. This trend is expected to continue in the coming years.
Additionally, it mentioned that the tax amnesty allowed for the capture of 12 billion dollars in foreign currency deposits.
In terms of financing, they consider that the agreement with the IMF and the reduction of country risk will facilitate the arrival of investments in the country.
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