Market Expectations Survey (REM)

Report of the main macroeconomic forecasts according to the monthly survey.

This report, published on June 6, 2024, disseminates the results of the survey carried out between May 27 and 31, 2024. Forecasts from 36 participants were considered, including 23 local and international consulting firms and research centers and 13 financial institutions from Argentina.

In the fifth survey of the year, REM participants estimated monthly inflation of 5.2% for May (-2.3 p.p. compared to the previous REM). For June, they projected monthly inflation of 5.5% and for the year of 146.4% y.o.y. (-1.3 p.p. and -15.0 p.p. in relation to the previous survey, respectively). Regarding the Core CPI, the REM participants as a whole placed their forecasts for May at 5.0% and for June at 4.8%. Those who best forecast this variable in the past (Top-10) expected inflation of 5.3% for May, 5.5% for June and 143.5% y.o.y. for 2024.

In the May survey, the REM analysts projected a level of real Gross Domestic Product (GDP) for 2024 3.8% lower than the average for 2023, deteriorating the outlook by 0.3 p.p. compared to the previous survey. Meanwhile, those who make up the Top-10 projected, on average, a reduction of 3.9% in the year. The fall would have been concentrated in the first quarter, a period for which those who respond to the REM estimated a seasonally adjusted fall of 3.0% of GDP. 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 3.4% y.o.y.

The open unemployment rate for the first quarter of the year was estimated at 7.4% of the Economically Active Population (EAP), implying an increase of 0.4 p.p. compared to the previous REM. For the Top-10, the unemployment rate would stand at 7.2% in the same period. The REM participants as a whole expect an unemployment rate of 7.5% for the last quarter of 2024.

REM participants forecast a BADLAR rate of private banks for June of 32.0% TNA (equivalent to a monthly effective rate of 2.6%) and a decrease to 30.0% TNA in December. Those who make up the Top-10 predicted, on average, that it would stand at 31.3% in June.

The median of the REM’s nominal exchange rate projections stood at $904.3 per dollar for the average of June 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 June is $906.4/USD. The year-on-year variation as of Dec-24 implied in the forecasts stood at 83.0%, 19.5 p.p. lower than the previous REM.

Regarding foreign trade in goods, those participating in the REM estimated that by 2024 exports (FOB) will total USD77,904 million and imports (CIF) USD61,517 million, both correcting downwards compared to the previous survey (-USD1,062 million and -USD1,380 million, respectively).

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 $4,447 billion for 2024 ($27 billion higher than the previous REM). The Top-10 average forecasts a primary surplus of $3.71 billion by 2024.