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.

March 2023

In the third survey of the year, analysts estimated monthly inflation of 7.0% for Mar-23 and inflation for the whole year of 110.0% y.o.y. (10.2 p.p. above the forecast of the previous survey). Those who best forecast this variable in the short term (TOP-10) also expect inflation of 7.0% for Mar-23, and 108.5% y.o.y. for 2023 (5.7 p.p. higher than the February survey). For February 2023, the median of the estimates of those who participated in the previous REM survey suggested inflation of 6.1% per month, while the data observed in that month turned out to be 6.6% (0.5 percentage points —p.p.— higher than forecast). In turn, REM participants revised the forecasts for all periods, placing inflation at 90.0% YoY for 2024 (8.3 p.p. higher than the previous REM) and at 54.6% YoY (+0.9 p.p.) for 2025.

Regarding the Core CPI, analysts projected a monthly variation of 6.8% for March (0.8 p.p. above the forecast of the previous survey), higher than the forecast of those who best projected this variable for the short term (6.5% monthly). REM participants revised upwards their core inflation forecasts for 2023, placing it at 109.8% YoY (12.3 p.p. more than the previous REM), and for 2024, at 94.2% YoY (6.3 p.p. above the February survey). For the 2025 annual period, analysts projected core inflation of 51.9% YoY (0.7 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 2.7 points (-2.7 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 3.0% (a downward correction of 2.2 p.p. compared to the previous REM). For 2024, REM participants estimate an average annual growth of 0.7% (0.3 p.p. lower than the February survey).

For Apr-23, REM participants forecast a BADLAR rate of private banks of 72.60%, higher than the average rate recorded during the month of March 2023 (70.98%). Those who best forecast the rate in the short term predict, on average, that it will stand at 72.42% in the month of Apr-23.

REM analysts forecast the average nominal exchange rate of $215.00 per dollar for Apr23 (6.0% expected monthly variation) and those who more accurately forecast this variable in the short term projected that the average nominal exchange rate for the same period will be $215.19/US$ (6.1% monthly variation).

As for the value of exports (FOB), those who participate in the REM estimate an amount, for 2023, of US$ 74,391 million, higher than the forecast of the members of the TOP-10 who projected the value of exports at US$ 73,813 million. As for imports (CIF) for the year 2023, the projections for the set of REM participants stood at US$ 71,195 million, while the members of the TOP-10 estimated them at US$ 71,313 million. Thus, REM participants contemplate, for the year 2023, a year-on-year drop of 15.9% in the value of exports and 12.7% for imports.

Those who participate in the REM estimate for the first quarter of 2023 an unemployment rate of 7.0% of the Economically Active Population (EAP; -0.5 p.p. compared to the previous REM). For the members of the TOP10, 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 2023.

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 $ 3,800 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 $ 3,439 billion for 2023.