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.

Executive Summary | September 2023

This report, published on October 12, 2023, disseminates the results¹ of the survey carried out between September 27 and 29, 2023. Forecasts from 36 participants were considered, including 24 local and international consulting firms and research centers and 12 financial institutions from Argentina.

For September 2023, the median of the estimates of those who participated in the REM survey suggested inflation of 11.7% per month, while the data observed in that month turned out to be 12.7% (1.1 percentage points —p.p.— higher than forecast by the REM). In the ninth survey of the year, analysts estimated monthly inflation of 9.5% for October and inflation for the whole year of 180.7% y.o.y. (11.4 p.p. more than the previous survey). Those who best forecast this variable in the past (TOP-10) expected inflation of 9.4% for October and 183.8% y.o.y. for 2023. Regarding the Core CPI, REM participants placed their forecasts for 2023 at 187.5% y.o.y.

In the September survey, REM analysts projected for 2023 a level of real Gross Domestic Product (GDP) 2.8% lower than the average for 2022, improving the outlook by 0.14 p.p. compared to the previous survey. This improvement is concentrated in the third quarter, a period for which participants reduced their outlook for quarterly GDP contraction by 1 p.p. without seasonality. Meanwhile, those who best forecast this variable in the past projected, on average, a reduction of 2.7% in the year. For 2024, all REM participants estimated a new average contraction of 1.2% YoY, which implied a deterioration of 0.6 p.p. compared to the previous survey.

Those who participate in the REM estimated that in the third quarter of 2023 there would have been an unemployment level of 6.9% of the Economically Active Population (PEA, -0.5 p.p. versus the previous survey). For the average of the members of the TOP-10, the unemployment rate would have stood at 6.7% in the same period.

For October, REM participants forecast a BADLAR rate of private banks of 114.1% TNA, equivalent to a monthly effective rate of 9.4%. REM participants expected an interest rate hike in the coming months, reaching 125.5% in December, equivalent to a monthly rate of 10.3%. Those who best forecast this variable in the short term predicted, on average, that it would rise to 117.1% in the month of October.

REM analysts forecast the nominal exchange rate at $350.0 per dollar for the October 2023 average (an expected monthly variation of 0.0% as has been happening daily since August 15). Those who have more accurately forecast this variable in the past projected that the average nominal exchange rate for October will be $365.6/US$. Between Nov-23 and Feb-24 they forecast positive rates of variation for this variable, projecting a wholesale dollar price of $776.3 on Mar-24.

Regarding the value of exports (FOB), those who participate in the REM estimated an amount, for 2023, of US$68,363 million, higher than the forecast of the members of the TOP-10 who projected the value of exports at US$67,515 million. As for imports (CIF) for the year 2023, the projections for the set of REM participants stood at US$73,204 million, while the members of the TOP-10 estimated them at US$73,132 million. Thus, the REM participants contemplate, for the year 2023, a deficit FOB-CIF trade balance of US$ 4,841 million.

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 $5,005 billion for 2023 and $3,749 billion for 2024 (a deficit higher by $517 billion and $1,249 billion than that surveyed in the previous survey, respectively). The average of the 10 most accurate forecasters for this variable expects a deficit of $4,733 billion for 2023.

1 Unless otherwise specified, the results of the REM will refer to the median of the forecasts. In the case of the results of the Top 10, it refers to the average of the predictions.