Key View: We hold a negative outlook for the Argentine consumer over 2023. Rapid inflation and high interest rates will result in depressed consumer purchasing power and a significant contraction in total household spending. Tight labour market conditions will support household disposable incomes, however, this will lead to continued policy rate hikes by the central bank in 2023, presenting downside risks to spending. Argentine consumer spending will contract by -1.1 y-o-y over 2023, down from 9.5 y-o-y in 2022. We project economic conditions to worsen in Argentina over 2023, with sticky inflation and high interest rates bearing down on household disposable incomes. This will weaken consumers' purchasing power as inflation erodes Argentine consumers’ disposable incomes. In nominal terms, we forecast total household spending (2010 prices) will decrease from ARS1,171.0 in 2022, to ARS1,158.3 over 2023.
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