The dollar, inflation, the economy… issues that seem super big but that affect our daily lives much more than we think. How much will the dollar cost next year? Will prices continue to rise? These are questions we all ask ourselves as we try to organize ourselves economically in a country where uncertainty is practically routine.
According to the latest projections, 2025 could bring a little calmer to these waters… Although the dollar will continue to rise, it would do so in a more controlled manner, and inflation, that monster that hits our pockets, could finally begin to slow down. But what is behind these figures and what does all this mean for you?
Why is the dollar rising?
Mainly for two reasons: inflation and economic uncertainty. In Argentina, according to the latest report from the Central Bank, known as REM (Market Expectations Survey), the wholesale dollar is expected to cost $1,042 in January 2025 and gradually rise to $1,205 by the end of the year.
Although these figures seem high, experts believe that the increase will be more moderate than in previous years. This is because Javier Milei’s economic plan (which seeks to reduce the fiscal deficit and control the issuance of money) could give more stability to the price of the dollar.
And what is inflation?
Inflation is the general increase in prices. Basically, prices go up and up but your salary doesn’t, so it’s increasingly difficult to buy things because your purchasing power (the ability to buy things) is much lower. The worst thing? That it has always been a problem in Argentina. This same report determines that inflation would end 2024 at a very high 117.8%, but there is a ray of light on the horizon: by 2025, it is expected to drop to 25.9%.
What is expected for Argentina’s economy?
After a rather difficult year with a 2.6% drop in economic activity, experts expect a positive change for 2025: 4.5% year-on-year growth (this means that there are signs of recovery on the horizon!!).
As investments increase, consumption would also improve a little. Although some analysts are more cautious and project lower growth, most agree that things could improve a little.
And what about foreign trade?
As for foreign trade (what Argentina sells and buys from the rest of the world) it also shows numbers that convey peace. By 2025, exports (what we sell) are expected to reach 82.818 billion dollars, while imports (what we buy) would reach 67.449 billion dollars. This would generate a trade surplus, which basically means that we will sell more than we buy!
What about employment and interest rates?
Employment is another important issue. The unemployment rate is projected to fall slightly, from 7.2% at the end of 2024 to 7% in 2025.
Interest rates (which affect things like loans) could also fall. They are expected to fall from 34% per year in January 2025 to 25% by the end of the year.
How does this affect our daily lives?
If the dollar rises and inflation begins to fall, that could mean more stable prices for basic goods (fewer surprises at the supermarket) and an economy that, while still having its own challenges, could offer a little more predictability.
If these projections come true, even if prices continue to rise, it could be a year with less economic uncertainty and much more tranquillity. This would make ordinary citizens feel much more comfortable when planning their months, everything seems much more optimistic than the previous year, but… since Argentina is so changeable, we will have to wait for the next few months to know how this country is going to develop economically to know if Milei’s plan is working.