March 3, 2020. The predictive performance of the Market Expectations Survey (REM) has been rather disappointing over the past couple of years, even casting a shadow over its usefulness. For this reason, the BCRA has created incentives for participants to produce more accurate forecasts, eventually improving the results of the REM. The BCRA thus implements a method to continuously assess the performance of this tool.
Following this criterion, the BCRA will start to publish, together with the results of the REM, a list of the participants that produce more accurate forecasts in order to stimulate participation and encourage surveyed analysts to improve their predictive capability.
According to the proposed methodology—in line with the best international practices and BCRA's own experience conducting the REM since 2004—the most accurate forecasters shall be those making the lowest (relative) forecast error in their projections over a certain period of time.
Since February 2020, the BCRA will supplement the results of the REM with a list of the top 10 forecasters for each variable surveyed, with a special acknowledgment to those institutions ranked in the first three places. From now on, an updated list of participants' individual achievements will be available.
In addition, the monthly report on the results of the REM will calculate the average of the projections made by the top 10 forecasters on a variable basis, an approach similar to that used by other central banks in the region.
It is worth noting that the forecasts included in the REM fall outside the scope of BCRA’s projections. In fact, they are prepared by specialized local and foreign analysts on the basis of selected macroeconomic variables of Argentina. The survey includes expectations on retail prices, interest rates, nominal exchange rates, level of economic activity and primary balance of the non-financial national public sector.
Currently, 52 institutions voluntarily participate in the survey, including domestic banks, economic consultants, universities, brokers, as well as investment banks and international analysts with broad experience in the analysis of the local economic and financial context. Any institution with proven experience in the analysis of the local context and in the development of projections that wishes to participate in the REM may request admission by sending an email to email@example.com
We would like to share February 2020 report in full, based on a survey aimed towards specialized local and foreign analysts. The survey is carried out on the last three working days of each month, and aggregate results are posted on the second working day of the following month.