Market Expectations Survey (REM)

This report, published on July 4, 2024, disseminates the results of the survey carried out between June 26 and 28, 2024. Forecasts from 38 participants were considered, including 26 local and international consulting firms and research centers and 12 financial institutions from Argentina.

In the sixth survey of the year, REM participants estimated monthly inflation of 5.2% for June (-0.3 p.p. compared to the previous REM). For July, they projected monthly inflation of 4.8% and for the year of 138.1% y.o.y. (-0.7 p.p. and -8.3 p.p. in relation to the previous survey, respectively). Those who best forecast this variable in the past (Top 10) expected inflation of 136.6% y.o.y. for 2024 (-6.9 p.p. in relation to the previous REM). Regarding the Core CPI, the REM participants as a whole placed their forecasts for June at 3.7% and for July at 4.1%. The Top 10 expected core inflation of 3.9% for June and July, and 114.7% YoY for 2024.

In the June survey, the REM analysts projected a level of real Gross Domestic Product (GDP) for 2024 3.7% lower than the average for 2023, improving the outlook by 0.1 p.p. compared to the previous survey. Meanwhile, those who make up the Top 10 projected, on average, a reduction of 3.5% 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 0.5% s.e. By 2025, the REM participants as a whole estimated an average growth of 3.2% YoY.

The open unemployment rate for the second quarter of the year was estimated at 7.9% of the Economically Active Population (EAP), implying an increase of 0.3 p.p. compared to the previous REM. For the Top 10, the unemployment rate would stand at 7.7% in the same period. 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 July of 33.4% TNA (equivalent to a monthly effective rate of 2.78%) and a slight increase to 34.0% TNA in December. Those who make up the Top 10 predicted, on average, that it would stand at 35.8% in July.

The median of the REM’s nominal exchange rate projections stood at $922.7 per dollar for the average of July 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 July is $941.1/USD. The year-on-year variation to Dec-24 implicit in the forecasts stood at 83.0%, -0.1 p.p. lower than the previous REM.

Regarding foreign trade in goods, those who participate in the REM estimated that by 2024 exports (FOB) will total USD78,099 million (USD 195 million more than the previous survey) and imports (CIF) USD60,133 million (USD1,384 million less than the previous survey).

Finally, the projection of the primary fiscal surplus of the National Non-Financial Public Sector (NFPS) made by those who participate in the REM stood at $6,076 billion for 2024 ($1,629 billion higher than the previous REM). The Top 10 average forecasts a primary surplus of $6.197 billion by 2024. None of the participants expect a primary deficit for 2024.