Fynsa
A classic of these dates is to start projecting the year that has just begun. This is done in all areas: political, sports, social, romantic, etc. Of course, the economic sphere cannot be the exception, although clearly the expectations about its performance have not just begun.
Given this, I wanted to summarize our main projections for 2023, risk that, in twelve months' time, they will pass me the bill.
In terms of growth, it will not be a positive year. The slowdown in activity during 2022 did not show up as strongly in the numbers, except for the last few months. was not so strongly reflected in the numbers, with the exception of the last few months. This trend will not changeThe difference is that now the basis for comparison will no longer be benign, which will be particularly true for the services sector. Thus, with probably a few laggards, activity is likely to be in the red until the third quarter. All in all, compared to the year just ended, GDP is expected to fall by around 1%.
Inflation was the most important economic issue for Chileans during 2022, after many years of calm derived from a solid macroeconomic (and, why not say it, political) institutional framework. Hunger met the desire to eat and the excessive local liquidity together with the violent escalation of international prices, including exchange rate depreciation, formed a toxic cocktail for our usual inflationary calm. The year closed with a 12.8% increase in the CPI, although some of the most sensitive areas for the population increased much more (such as food and transportation)..
While it is true that price increases should give some respite during 2023, it is also true that this will not happen overnight. Several elements conspire against this objective, such as indexation, but also some delayed tariff increases that, at this point, are becoming unsustainable. In addition, the dynamics of food prices do not seem to be abating and, together with the evolution of fuel, will continue to be a latent risk that will have to be considered. All in all, we expect the variation to December of this year to be more or less 4.7%.
Finally, and related to the above, rates will remain high until there is more than enough evidence not to throw away a job that has cost the Central Bank blood, sweat and tears. until there is more than enough evidence not to throw away a job that has cost blood, sweat and tears to the Central Bank, which has taken the TPM to 11.25%. According to our estimates, with this the Central Bank has carried out the most restrictive monetary policy since the return to democracy, including the subprime crisis.
Considering the numerous risks we raised in the previous paragraph, it would seem more reasonable to follow a "pay-as-you-go" strategy, even if it means reacting late to a stronger slowdown that is more quickly evident in local prices. Not all the market shares our diagnosis, with a consensus that expects the cuts to begin during the second quarter. For our part, we believe that this process will only begin during June or July, ending in December at around 8%.
Keep this column for twelve months, and see how we do.
