In the first months of the year 2023 there are clear messages of optimism and dark omens to worry us.
1 International reserves as of March were around US$16 billion (13.3% of GDP), surpassing the end of 2022 by US$1.5 billion.
2 The BCRD has just announced that it will maintain its monetary policy rate at 8.5% despite the last two FED rate hikes that have brought it to 5-5.25%. A prudent and wise decision based on the fact that the country continues to receive foreign currency from different sources.
3 Inflation as of February is 6.34%, falling 326 basis points compared to the 9.64% registered in April 2022. It is possible that it will approach 5% in the first half of 2023.
4 But growth has slowed down, registering 0.4% in January and 1.8% in February, averaging 1.1% in the first two months of 2023. The new projections set such growth between 4% and 4.25% for this year. The world economy projects growth of 2%, the United States 1.0%, Europe 0.5% and LAC 3.0%.
5 The drop in growth as a result of a slowdown in demand and credit. The growth of the latter has dropped from 15% in 2022 to 12.5% ​​in 2023. Active rates (loans) have risen around 5.5%.
6 Bank ratios far exceed the levels required by regulatory standards.
7 The medium in circulation (M1), which grew a maximum of 30% year-on-year during 2021, is below 10% in March 2023, reflecting the normalization of the money supply as a result of the measures adopted. There is still enough liquidity in the financial system.
8 So far there have been no significant losses in the level of employment, although it is early to predict the impact of the latest wage increases.
9 Oil is rising again due to the recovery of stock markets after the near banking crisis in the United States. The FED has injected liquidity into the entire system to avoid contagion and has protected public deposits, regardless of their amount.
10 Finally, the ideal is to close 2023 with inflation below 5%, improve employment through foreign investment, achieve growth of 4% and an exchange rate depreciation of 2%. Beautiful panorama within a sea of ​​uncertainty and terrible predictions.