Projections for October continue to point to sharp drops in interest rates

Inflation and interest rates continue to be two indicators that maintain the attention of investors and market experts, since although they have given positive signs in recent months, they are still far from the ranges that the economy needs. to recover its dynamism, in the midst of an environment of relative calm.

In this sense, the Fedesarrollo economic and social research center published this Tuesday – October 22 – the most recent version of the Financial Opinion Survey in which it can be seen that the optimism of analysts regarding rates and the cost of living It is high and that for the reports to come, they project good news for the country.

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As a first piece of information, and taking into account that in September the Board of Directors of the Banco de la República decided to reduce the intervention rate by 50 basis points and left it at 10.25%; from Fedesarrollo maintain that the next meeting of the monetary authority It will be important, since there is more information about what is coming in economic matters.

“The next meeting in which a decision will be made on the intervention rate will be on October 31, 2024. For the month of October, analysts expect the intervention rate to be 9.50%. They also anticipate that the intervention rate will be 8.75% in December 2024 (remaining stable compared to the previous month), and 8.25% in January 2025,” they reported.

On the other hand, regarding inflation, the survey starts highlighting that the annual figure stood at 5.81% last month and that this was a result well below the analysts’ forecast (5.87%); With which several fears regarding the effect that the trucker strike and the international situation could have were also allayed.

“In October, analysts consider that inflation will be 5.70%, in a range between 5.68% and 5.75%. They also predict that in December 2024 inflation will close at 5.43% (decreasing compared to the 5.60% expected in the September edition), in a range between 5.31% and 5.56%, so expectations They remain outside the target range of the Bank of the Republic (2-4%). For their part, 12-month expectations (October 2025) are at 4.06%,” they added.

Growth and dollar

Fedesarrollo took the opportunity to speak with analysts about their Gross Domestic Product projections for 2024 and found that in October bets were in a range between 1.8% and 2.0%, with 1.8% as a medium response, which maintains stability compared to the September expectation.

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“The median for 2025 stood at 2.6% (remaining stable compared to the September expectation), ranging between 2.4% and 2.9%. Growth expectations for the third quarter of 2024 were in a range between 2.0% and 2.4%, with 2.1% as the median response, increasing from 2.0% in the September edition. The growth forecast for the fourth quarter of 2024 was 2.1%, increasing compared to the 2.0% expected in September,” the report says.

Likewise, in the case of the dollar they pointed out that, based on the fact that the rate The exchange rate closed at $4,164, with a monthly depreciation of 0.1% and reaching its maximum value of the month on September 11 ($4,286) and its minimum value on September 25 ($4,139). Last month, the observed data was $21 lower than expected in the September survey ($4,185).

Interest rates

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“In October, analysts consider that the exchange rate will be in a range between $4,190 and $4,250, with $4,200 as the median response. By the end of 2024, they expect an exchange rate of $4,150, which represents an increase compared to the previous month’s forecast ($4,140),” Fedesarrollo highlighted.

Finally, in the chapter on factors to take into account when investing, the report indicates that portfolio managers increased their preferences for local and international stocks, private debt indexed to the CPI, the IBR and the DTF and the TES UVR; while a decrease was evident in preferences for fixed rate TES, private equity funds, commodities, fixed rate private debt, foreign bonds and cash.