The outlook, issued by the central bank's technical team, influences the interest rate decisions adopted by the bank's seven-member board, which raised borrowing costs to 13.25% on Friday.
The persistently high prices this year and next are principally due to increased fuel prices, the team said in its quarterly monetary policy report. Other factors include a weaker peso.
"It is predicted that at the end of 2023 total annual inflation will be around 9.5% and that it will continue its shrinking tendency during 2024, to situate itself at the end of that year at a figure close to 3.5%," the report said.
The central bank's long-term inflation target is 3%, but full-year inflation was 13.12% in 2022.
"The descent of annual consumer inflation has been postponed until the second quarter of 2023, when it will converge toward the target rate in the estimate horizon, in part as a result of accumulated efforts in monetary policy," the report said.
Despite a slowing of growth in annual terms, levels of economic activity remained high in the first three months of the year, the team said. It forecast growth in Latin America's fourth-largest economy of 3% for the first quarter.
Central bank board chief Leonardo Villar said on Friday the technical team had raised its forecast for economic growth for the full year 2023 to 1%, from 0.84% previously.
Gross domestic product expanded 7.5% in 2022.
(Reporting by Julia Symmes Cobb; Editing by Edmund Klamann)
