• We maintain our growth estimates at 3.7% and 3.9% for 2013 and 2014 despite the positive surprises in 1H13. In 2H13, domestic demand will slow down due to an incipient deterioration in the labor market and lower investment levels.
• The Central Bank shifts from an interest rate instrument towards monetary aggregates, but inflation remains above the target range. We have raised our inflation forecast to 8.7% in 2013 (8.2% in 2014).
• Fiscal policy remains lax despite the low level of domestic saving: the overall budget balance will close the year with a deficit of 2.1% of GDP and 2.3% next year.
• We keep our exchange rate forecast of $/USD 21.5 for 2013 and $/USD 23.6 for 2014, insofar as the United States begins to reduce monetary stimuli and the US dollar appreciates further in Latam.
• In 2013, the trade balance is improving due to lower oil import requirements, although the current account deficit will remain high (3.6% of GDP in 2013 and 3.4% in 2014) due to tourism restrictions in Argentina