The Market Expectations Survey (REM) released today by Central bank show a sharp reduction in inflation expectations for the whole year.
In the third survey of the year, those who participated in the REM estimated monthly inflation of 12.5% for March, down 1.8 percentage points from the previous report. Minister Luis Caputo anticipated days ago that last month’s figure would be around 10%.
Inflation is expected to be 10.8% for April, down 1.3 points compared to the previous REM, and for May it is estimated at 9%. They thus anticipate by a month the single-digit inflation which in the February measurement was only estimated for June.
For the whole of 2024 the forecast is now 189.4%, down 20.8 points compared to the previous survey. If these projections were respected, the year would end with inflation lower than that of 2023, which reached 211%.
The investigation was carried out between March 25 and 27 and includes the predictions of 37 participantsincluding 24 local and international consultancy firms and research centers and 13 financial entities in Argentina.
Drop in activity
The REM analyst group has forecast the level of Gross Domestic Product (GDP) for 2024 effective 3.5% lower than the 2023 average, no change compared to the previous month’s survey.
Meanwhile, those who make up the Top 10 best-performing pollsters predict, on average, a 4.1% reduction for the year’s business.
The decline would have been concentrated in the first quarter, the period for which REM responders respond A GDP contraction of 3.8% is estimated without seasonality. According to their predictions, The level of activity would begin to recover in the third quarter of the year, with an increase of 0.6%.
At the same time, The forecasts implicitly show a strong increase expected for the fourth quarter of the year of around 4.1%. By 2025, the REM participant group estimated an average annual growth of 3.0%.
The open unemployment rate for the first quarter of the year was forecast at 7.1% of the economically active population (EAP), a significant leap compared to the unemployment rate of 5.7% with which 2023 ended.
Those participating in the REM expect private banks to have a BADLAR rate for the month of April 71.9% TNA (equivalent to a monthly effective rate of 5.9%) and a decrease to 60.0% in December.
In tune with what is happening in the financial sector, with marked declines in alternative dollars, REM analysts are cooling their devaluation forecasts. Now they project the nominal exchange rate $876.3 per dollar for the April 2024 average. This implies a decrease $51.50 per dollar compared to the previous REM.
For the top 10 the expected average nominal exchange rate for April is $885.3 per dollar. The interannual variation as of December 24th implicit in the forecasts was placed at 124.0%, 26.8 points less than the previous REM.
As regards foreign trade in goods, consultants estimate that by 2024 exports will be total 80,842 million dollars and imports 65,162 million dollarscorrecting both downwards compared to the previous survey (-771 million dollars and -1,660 million dollars respectively).
Finally, the projection of the primary budget surplus of the National Non-Financial Public Sector (SPNF) made by the REM participants was placed at $4.924 billion by 2024 (4,138 billion dollars more than the previous REM). The average of the top 10 projects a primary surplus of $4.152 billion by 2024.
Source: Clarin
