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.
Expectations about retail prices, the interest rate, the nominal exchange rate, exports and imports, the primary result of the national non-financial public sector, unemployment and economic activity are revealed.

This report, published on September 5, 2024, disseminates the results of the survey carried out between August 28 and 30, 2024. Forecasts from 42 participants were considered, including 28 local and international consulting firms and research centers and 14 financial institutions from Argentina.

In the eighth survey of the year, REM participants estimated monthly inflation of 3.9% for August (+0.1 p.p. compared to the previous REM). For September, they projected monthly inflation of 3.5% and for the year of 122.9% y.o.y. (-0.2 p.p. and -4.75 p.p. in relation to the previous survey, respectively).
Those who best forecast this variable in the past (Top 10) expected inflation of 3.9% for August, 3.5% for September and 123.7% y.o.y. for 2024 (+1.5 p.p. in relation to the previous REM).

Regarding the Core CPI, the REM participants as a whole placed their forecasts for August at 3.5% and for September at 3.2%. The Top 10 expected core inflation of 3.5% for August, 3.0% for September and 105.9% YoY for 2024 (-1.1 p.p. compared to the previous REM).

In the August survey, the REM analysts projected for 2024 a level of real Gross Domestic Product (GDP) 3.8% lower than the average for 2023 (-0.1 p.p. in relation to the previous REM).

Meanwhile, those who make up the Top 10 projected, on average, a reduction of 3.7% in the year. The fall would have been concentrated in the first half of the year. According to the forecasts received, the level of activity would begin to recover in the third quarter of the year, with a rise of 0.9% s.e. By 2025, the REM participants estimated an average growth of 3.5% YoY.

The open unemployment rate for the second quarter of the year was estimated at 8.0% of the Economically Active Population (EAP), remaining the same with respect to the previous REM. For the Top 10, the unemployment rate would stand at 7.8% in the same period (+0.1 p.p. compared to the previous REM). The REM participants as a whole expect an unemployment rate of 8.1% for the last quarter of 2024.

REM participants forecast a BADLAR rate of private banks for August of 38.5% TNA (equivalent to a monthly effective rate of 3.2%) and a slight increase to 39.0% TNA in December.
Those who make up the Top 10 predicted that it would stand at 39.0% in September. The median of the REM’s nominal exchange rate projections stood at $961.9 per dollar for the average of September 2024, which would imply an average monthly increase of 2.0% in the exchange parity. For the Top 10, the average nominal exchange rate expected for September is $964.1/USD.
For December, the group of participants forecasts a nominal exchange rate of $1,025.4/USD. The year-on-year variation as of Dec-24 implicit in the forecasts stood at 59.7% (9.8 p.p. less than the previous REM).

Regarding foreign trade in goods, those participating in the REM estimated that by 2024 exports (FOB) will total USD77,857 million (USD663 million more than the previous survey) and imports (CIF) USD59,163 million (USD652 million more than the previous survey). The resulting annual trade surplus would be expanded by USD11 million.

Finally, the projection of the primary fiscal surplus of the National Non-Financial Public Sector made by those who participate in the REM stood at $7,829 billion for 2024 ($445 billion higher than the previous REM). The Top 10 average forecasts a primary surplus of $7.334 billion by 2024. No participant expects a primary deficit for 2024.