Market Expectations Survey (REM)

The Market Expectations Survey (REM) consists of a systematic monitoring of the main short- and medium-term macroeconomic forecasts usually made by local and foreign specialists on the evolution of selected variables of the Argentine economy compiled by the Central Bank of the Argentine Republic (BCRA). It should be noted that the forecasts made in this report do not constitute projections of the BCRA.

February 2023

For January 2023, the median of the estimates of those who participated in the previous REM survey suggested inflation of 5.6% per month, while the data observed in that month turned out to be 6.0% (0.4 percentage points —p.p.— higher than forecast). In the second survey of the year, analysts estimated monthly inflation of 6.1% for Feb-23 and inflation for the whole year of 99.9% y.o.y. (2.3 p.p. above the forecast of the previous survey). Those who best forecast this variable in the short term (TOP-10) expect inflation of 6.2% for Feb-23, and 102.9% y.o.y. for 2023 (7.6 p.p. higher than the January survey). In turn, REM participants revised their forecasts for the following periods, placing inflation at 81.7% YoY for 2024 (2.1 p.p. higher than the previous REM) and at 53.8% YoY (+3.5 p.p.) for 2025.

Regarding the Core CPI, analysts projected a monthly variation of 6.0% for February (0.6 p.p. above the forecast of the previous survey), equal to the forecast of those who best forecast this variable in the short term (TOP-10). REM participants revised upwards their core inflation forecasts for 2023, placing it at 97.5% YoY (2.0 p.p. more than the previous REM), and for 2024, at 87.9% YoY (9.7 p.p. above the January survey). For the 2025 annual period, analysts projected core inflation of 52.5% YoY (3.5 p.p. higher than the previous REM).

REM participants expect a level of real Gross Domestic Product (GDP) for 2023 similar to that of 2022 (-0.6 p.p. lower than projected in the previous REM), while the TOP-10 of those who best forecast economic growth in the past projects, on average, a fall of 0.8% (a downward correction of 1.6 p.p. compared to the previous REM). For 2024, REM participants estimate an average annual growth of 1.0% (the same as in the January survey).

For March 2023, REM participants forecast a BADLAR rate of private banks of 69.95%, slightly higher than the average rate recorded during the month of February 2023 (69.77%). Those who best forecast the interest rate in the short term predict, on average, that it will stand at 69.90% in the month of Mar-23.

REM analysts forecast the average nominal exchange rate of $202.67 per dollar for March 2023 (5.6% expected monthly variation) and those who more accurately forecast this variable over short-term horizons projected that the average nominal exchange rate for the same period will be $202.73/US$ (5.7% monthly variation).

As for the value of exports (FOB), those who participate in the REM estimate an amount, for 2023, of US$ 80,138 million, higher than the forecast of the members of the TOP-10 who projected the value of exports at US$ 79,074 million. As for imports (CIF) for the year 2023, the projections for the set of REM participants stood at US$ 75,045 million, while the members of the TOP-10 estimated them at US$ 76,023 million. Thus, the REM participants contemplate, for the year 2023, a 9.4% drop in the value of exports and 7.9% for imports.

Those who participate in the REM estimate for the fourth quarter of 2022 an unemployment rate of 7.3% of the Economically Active Population (EAP; equal to the previous REM). For the members of the TOP-10, the unemployment rate also stood at 7.3% for the fourth quarter of 2022. In both cases, they foresee a rise in the unemployment rate during 2023.

Finally, the projection of the nominal primary fiscal deficit of the National Non-Financial Public Sector (NFPS) made by the participants for 2023 was $ 3,198 billion. Likewise, analysts foresee a primary deficit of $ 3,020 billion for 2024. The average of the 10 most accurate forecasters over the past year for this variable expects a deficit of $ 3,238 billion for 2023.