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.

May 2023

In the current survey, carried out between the 29th and 31st of last month, analysts estimated monthly inflation of 9.0% for May 2023. After REM participants provided their forecasts to the BCRA, new information was released suggesting that monthly inflation moderated compared to the 8.4% observed in April. Both the various indicators of high frequency of wholesale and retail prices monitored by the BCRA and the CPI of the Autonomous City of Buenos Aires (7.5% increase in May) suggest a more contained evolution than in the previous month.

Meanwhile, REM analysts estimated inflation for the whole year of 148.9% y.o.y. Those who best forecast this variable in the short term (TOP-10) expect inflation of 147.4% y.o.y. for 2023. In turn, they revised the forecasts for 2024 and 2025, placing inflation at 105.7% YoY and 56.7% YoY, respectively. Regarding the Core CPI, REM participants revised upwards their core inflation forecasts for 2023, placing it at 148.5% YoY, and for 2024, at 106.4% YoY. For the 2025 annual period, they projected core inflation of 54.8% y.o.y.

Those who participate in the REM expect a level of real Gross Domestic Product (GDP) for 2023 lower than in 2022 by 3.0%, while the TOP-10 of those who best predicted economic growth in the past projects, on average, a reduction of 2.5%. For 2024, REM participants estimate an average annual contraction of 0.3%.

For Jun-23, REM participants forecast a BADLAR rate of private banks of 93.2%, higher than the average rate recorded during the month of May 2023 (90.0%). Those who best forecast the rate in the short term predict, on average, that it will stand at 94.24% in the month of June.

REM analysts forecast the average nominal exchange rate of $248.11 per dollar for June 23 (7.3% 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 $248.84/US$ (7.6% monthly variation).

As for the value of exports (FOB), those who participate in the REM estimate an amount, for 2023, of US$ 71,053 million, higher than the forecast of the members of the TOP-10, who projected the value of exports at US$ 70,444 million. As for imports (CIF) for the year 2023, the projections for the set of REM participants stood at US$ 70,400 million, while the members of the TOP-10 estimated them at US$ 69,429 million. Thus, REM participants contemplate, for the year 2023, a year-on-year drop of 19.7% in the value of exports and 13.6% for imports.

Those who participate in the REM estimate that in the first quarter of 2023 there would have been an unemployment level of 7.0% of the Economically Active Population (EAP). For the members of the TOP-10, the unemployment rate would have stood at 6.8% during the first quarter of 2023. The group of participants expects the unemployment rate to rise during the rest of the year to 7.5% for the last quarter of 2023.

Finally, the projection of the nominal primary fiscal deficit of the National Non-Financial Public Sector (NFPS) made by the participants stood at $ 4,500 billion for 2023 and $ 3,500 billion for 2024. The average of the 10 most accurate forecasters over the past year for this variable expects a deficit of $ 3,974 billion for 2023.