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.

January 2023

For December 2022, the median of the estimates of those who participated in the previous REM survey suggested inflation of 5.5% per month, while the data observed in that month turned out to be 5.1% (0.4 p.p. lower than forecast). In the first survey of the year, analysts estimated monthly inflation of 5.6% for Jan-23 and inflation for the whole year of 97.6% y.o.y. (0.9 percentage points —p.p.— below the forecast of the previous survey). Those who best forecast this variable in the short term (TOP-10) also expect inflation of 5.6% for Jan-23, but 95.2% y.o.y. for 2023 (5.9 p.p. lower than the December survey). In turn, REM participants revised inflation forecasts for the following periods, placing it at 79.6% y.o.y. for 2024 (4.6 p.p. higher than the previous REM) and at 50.3% y.o.y. (-0.8 p.p.) for 2025.

Regarding the Core CPI, at the end of January, analysts projected a monthly variation of 5.4% for that month (0.1 p.p. below the forecast of the previous survey), equal to those who best forecast this variable in the short term (TOP-10). However, REM participants revised upwards their core inflation forecasts for 2023, placing it at 95.5% YoY (0.8 p.p. more than the previous REM), and for 2024, at 78.2% YoY (0.8 p.p. above the December survey). On the other hand, for the 2025 annual period, analysts projected core inflation of 49.0% YoY (0.7 p.p. lower than the previous REM).

Those who participate in the REM expect real Gross Domestic Product (GDP) growth for 2023 of 0.5% (equal to the previous REM), while the TOP-10 of those who best forecast economic growth in the past also maintains, on average, a growth of 0.8% (equal to the previous REM). For 2024, REM participants estimate an average annual growth of 1.0% (0.4 p.p. lower than the December survey).

For February 2023, REM participants forecast a BADLAR rate of private banks of 69.39%, slightly lower than the average rate recorded during the month of January 2023 (69.47%). Those who best forecast the interest rate in the short term predict, on average, that it will stand at 69.28% in the month of Feb-23.

REM analysts forecast the nominal exchange rate at $192.30 per dollar on average for February 2023 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 $192.16/US$. Thus, the expected monthly variations are 5.5% and 5.4%, respectively.

Regarding the value of exports (FOB), those who participate in the REM estimate an amount, for 2023, of US$ 80,680 million, similar to the members of the TOP-10 who projected the value of exports at US$ 80,588 million. As for imports (CIF) for the year 2023, the projections for the set of REM participants stood at US$ 75,301 million, while the members of the TOP-10 estimated them at US$ 74,346 million. Thus, the participants of the REM contemplate, for the year 2023, a drop of 8.8% for exports and 7.6% 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 to 7.8%.

Finally, the projection of the nominal primary fiscal deficit of the National Non-Financial Public Sector (NFPS) made by the participants for 2023 was $ 3,157 billion. Likewise, analysts foresee a primary deficit of $ 3,100 billion by 2024. The average of the 10 most accurate forecasters over the past year for this variable expects a deficit of $ 3,147 billion for 2023.