This Tuesday, the Central Bank will release the updated projections of its Market Expectations Survey (REM) monthly. There, City analysts will announce their forecasts for him dollarthe inflation and the gross domestic product (GDP).
Inflation
In the last edition of the REMwhich was released in early July and compiled surveys conducted during the last days of June, the gurus projected that the consumer price index (CPI) would be at 4.8% in July, Although in line with the estimates released by various consulting firms in recent days, everything indicates that in the shipment that will be announced on Tuesday the percentage would be around 4%.
For the current year’s cumulative total, The previous REM marked an average inflation expectation of 138.1% year-on-year. “Those who best predicted this variable in the past (Top 10) expected an inflation of 136.6% year-on-year for 2024,” added the BCRA report.
Regarding the Core CPI, the REM participants set their forecasts for June at 3.7% and for July at 4.1%. The Top 10 expected a core inflation of 3.9% for June and July, and 114.7% year-on-year for 2024.
The novelty that this survey revealed was that, Until December, the market expected inflation to remain at a low of 4%above the Government’s forecasts but below the 5% floor that the REM had shown for the previous month.
Dollar
For the exchange rate, the projections from the survey a month ago placed it at $922 per dollar for the July 2024 average, which implies maintaining the “crawling peg” of 2% estimated by the Government itself.
However, by December an exchange rate of $1,173.8 was forecast, above the Government’s outlook according to the budget advancewhich sees a wholesale dollar at around $1.016. It will be key to see what exchange rate level the gurus now expect in a context marked by the drain on reserves and global headwinds.
GDP
Finally, in the June survey, the REM analyst group projected a 2024 Real Gross Domestic Product (GDP) level 3.7% lower to the average for 2023, improving the outlook by 0.1 pp compared to the previous survey.
Meanwhile, the Top 10 projected, on average, a reduction of 3.5% for the year, in line with the IMF’s expectations. The fall would have been concentrated in the first half of the year. According to the forecasts received, the level of activity would begin to recover in the third quarter of the year, with a 0.5% increase without seasonality.
For 2025, REM participants estimated an average year-on-year growth of 3.2%.
At the REM that will be announced this Tuesday, It will be important to see whether the Phase 2 announcements have any impact on the outlook for economic activity.
Source: Ambito
