Market Expectations Survey (REM)

This report, published on November 7, 2024, disseminates the results of the survey carried out between October 27 and 31, 2024. Forecasts from 43 participants were considered, including 29 local and international consulting firms and research centers and 14 financial institutions from Argentina.

In the tenth survey of the year, REM participants estimated monthly inflation of 3.0% for October (-0.4 p.p. compared to the previous REM). For November, they projected monthly inflation of 2.9% and for the year of 120.0% y.o.y. (-0.4 p.p. and -3.6 p.p. in relation to the previous survey, respectively).

Those who best forecast this variable in the past (Top 10) expected inflation of 3.0% for October, 2.9% for November and 120.2% y.o.y. for 2024. Regarding the Core CPI, the REM participants as a whole placed their forecasts for October at 2.9% and for November at 2.8%. The Top 10 expected core inflation of 3.0% for October and 2.9% for November.

In the October survey, the REM analysts projected for 2024 a level of real Gross Domestic Product (GDP) 3.6% lower than the average for 2023 (+0.2 p.p. compared 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 estimates received, the level of activity began to recover in the third quarter of the year, with an increase of 2.0% s.e. compared to the previous quarter. By 2025, the REM participants as a whole estimated an average growth of 3.6% YoY.

The open unemployment rate for the third quarter of the year was estimated at 7.8% of the Economically Active Population (EAP), remaining the same as 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 8.0% for the last quarter of 2024.

REM participants forecast a BADLAR rate of private banks for November and December of 40.0% TNA (equivalent to a monthly effective rate of 3.29%). It should be noted that the survey was carried out before the BCRA ordered, at the beginning of November, a reduction in the monetary policy rate from 40% to 35% of APR. Those who make up the Top 10 predicted that it would stand at 40.1% in November.

The median of the REM’s nominal exchange rate projections stood at $1,001 per dollar for the average of November 2024, which would imply an average monthly increase of 2.0% in the exchange rate parity. For the Top 10 the average nominal exchange rate expected for November is $1,004/USD.

For December, the group of participants forecasts a nominal exchange rate of $1,021/USD. The year-on-year variation to Dec-24 implicit in the forecasts stood at 59.0%.

Regarding foreign trade in goods, those participating in the REM estimated that by 2024 exports (FOB) will total USD77,864 million (USD254 million more than the previous survey) and imports (CIF) USD60,007 million (USD1,356 million more than the previous survey). The expected annual trade surplus was reduced by USD1,102 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 $9,014 billion for 2024 ($324 billion higher than the previous REM). The Top 10 average forecasts a primary surplus of $9.327 billion by 2024. No participant expects a primary deficit for 2024 or 2025.