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.

April 2023

In the April survey, analysts estimated monthly inflation of 7.5% for Apr-23 and inflation for the whole year of 126.4% y.o.y. (16.4 p.p. above the forecast of the previous survey). Those who best forecast this variable in the short term (TOP-10) expect inflation of 7.2% for Apr-23, and 126.5% y.o.y. for 2023 (17.3 p.p. higher than the previous month’s survey). For March 2023, the median of the estimates of those who participated in the previous REM survey suggested inflation of 7.0% per month, while the data observed in that month turned out to be 7.7% (0.7 percentage points —p.p.— higher than forecast). In turn, REM participants revised the forecasts for all periods, placing inflation at 107.5% YoY for 2024 (17.5 p.p. higher than the previous REM) and at 55.5% YoY (+0.9 p.p.) for 2025.

Regarding the Core CPI, analysts projected a monthly variation of 7.5% for April (1.2 p.p. above the forecast of the previous survey), higher than the forecast of those who best projected this variable for the short term (7.4% monthly). REM participants revised upwards their core inflation forecasts for 2023, placing it at 127.0% YoY (17.2 p.p. more than the previous REM), and for 2024, at 106.0% YoY (11.8 p.p. above the March survey). For the 2025 annual period, analysts projected core inflation of 53.5% YoY (1.6 p.p. higher than the previous REM).

Those who participate in the REM expect a level of real Gross Domestic Product (GDP) for 2023 lower than in 2022 by 3.1% (implying a fall 0.4 p.p. greater than that projected in the previous REM), while the TOP-10 of those who best predicted economic growth in the past projects, on average, a reduction of 3.2% (a downward correction of 0.2 p.p. compared to the previous REM). For 2024, REM participants estimate an average annual contraction of 0.2% (implying a variation in GDP 0.5 p.p. lower than forecast in March).

For May-23, REM participants forecast a BADLAR rate of private banks of 86.0%, higher than the average rate recorded during the month of April 2023 (74.24%). Those who best forecast the rate in the short term foresee, on average, that it will stand at 85.23% in the month of May-23.

REM analysts forecast the average nominal exchange rate of $232.30 per dollar for May-23 (7.26% expected monthly variation) and those who forecast this variable more accurately in the short term projected that the average nominal exchange rate for the same period will be $231.24/US$ (6.78% monthly variation).

Regarding the value of exports (FOB), those who participate in the REM estimate an amount, for 2023, of US$ 71,956 million, higher than the forecast of the members of the TOP-10 who projected the value of exports at US$ 71,606 million. As for imports (CIF) for the year 2023, the projections for the set of REM participants stood at US$ 70,529 million, while the members of the TOP-10 estimated them at US$ 69,144 million. Thus, the participants of the REM contemplate, for the year 2023, a year-on-year drop of 18.6% in the value of exports and 13.5% for imports.

Those who participate in the REM estimate that in the first quarter of 2023 there would have been an unemployment level of 7.1% of the Economically Active Population (EAP; +0.1 p.p. compared to the previous REM). For the members of the TOP-10, the unemployment rate would have stood at 6.9% during the first quarter of 2023. In both cases, they foresee a rise in the unemployment rate during the rest of the year to 7.5% in the Quarter. IV-23.

Finally, the projection of the nominal primary fiscal deficit of the National Non-Financial Public Sector (NFPS) made by the participants for 2023 stood at $ 4,016 billion. Likewise, analysts foresee a primary deficit of $ 2,786 billion for 2024. The average of the 10 most accurate forecasters over the past year for this variable expects a deficit of $ 3,552 billion for 2023.