Market Expectations Survey (REM)

This report, published on December 13, 2023, disseminates the results1 of the survey carried out between November 28 and 30, 2023, prior to the economic measures announced on December 12, 2023. Forecasts from 35 participants were considered, including 23 local and international consulting firms and research centers and 12 financial institutions from Argentina.

For November 2023, the median of the estimates of those who participated in the REM survey suggested inflation of 12.0% per month, while the data observed in that month turned out to be 12.8% (0.8 percentage points —p.p.— higher than that forecast by the REM). In the eleventh survey of the year, analysts estimated monthly inflation of 17.1% for December and inflation for the year of 189.2% y.o.y. (4.3 p.p. more than in the previous survey). Those who best forecast this variable in the past (Top-10) expected inflation of 18.4% for December and 192.0% y.o.y. for 2023 in the end-of-November survey. Regarding the Core CPI, REM participants placed their forecasts for 2023 at 200.1% YoY.

In the November survey, REM analysts projected for 2023 a level of real Gross Domestic Product (GDP) 1.4% lower than the average for 2022, improving the outlook by 0.6 p.p. compared to the previous survey. This improvement is concentrated in the third quarter, a period for which participants also raised their forecast by 0.6 p.p. Meanwhile, those who make up the Top-10 also projected, on average, a reduction of 1.4% in the year. For 2024, the REM participants as a whole estimated a new average contraction of 2.4% YoY, which implied a deterioration of 0.7 p.p. compared to the previous survey.

The open unemployment rate for the third quarter of the year was projected at 6.8% of the Economically Active Population (EAP, -0.1 p.p. compared to the previous REM). For the Top-10, the unemployment rate would also have stood at 6.8% in the same period. For the IV-24, the REM participants estimated an unemployment rate of 7.4% of the EAP, unchanged from the previous survey.

For December, REM participants forecast a BADLAR rate of private banks of 143.5% TNA, equivalent to a monthly effective rate of 11.8%. For January, REM participants expected an increase in the interest rate to reach 149.7% TNA, equivalent to a monthly rate of 12.3%. Those who make up the Top-10 predicted, on average, that it would stand at 146.7% in the month of December.

REM analysts forecast the nominal exchange rate at $590.2 per dollar for the December 2023 average (a parity 66.8% higher than the November average). For the Top-10, the average nominal exchange rate expected for December is $611.3/US$. Between Jan-24 and Apr-24, the group of participants forecasts positive rates of variation for this variable, projecting a wholesale dollar price of $1,164.8 in May-24.

Regarding foreign trade in goods, those who participate in the REM estimated that for 2023 exports (FOB) will total US$67,355 million and imports (CIF) US$74,336 million.

Thus, the participants of the REM contemplate, for the year 2023, a deficit FOB-CIF trade balance of US$ 6,980 million. For 2024, they expect a trade surplus of US$ 11,646 million (US$ 1,742 million higher than estimated in the previous REM).

Finally, the projection of the primary fiscal deficit of the National Non-Financial Public Sector (NFPS) made by the participants of the REM stood at $ 5,245 billion for 2023 and $ 928 billion for 2024 (a deficit lower by $ 44 billion and $ 3,071 billion than surveyed in the previous survey, respectively). The average of the Top 10 reaches a deficit of $ 5,000 billion by 2023.