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Dollar vs inflation: what does the market expect until the end of the year?

Dollar vs inflation: what does the market expect until the end of the year?

The Survey of Market Expectations (REM) of the Central Bank (BCRA) reported that the inflation For April it is estimated at 9% and for May at 7.5%, below previous perspectives. The dollar official What they expect in May was $886.6. at the end of the yearfor its part, Specialists predict an exchange rate of $1,300 per dollar.

Furthermore, the annual projection places it at 161.3%, which is equivalent to a drop of 28 percentage points compared to what was forecast last month.

Regarding the level of activity, REM analysts projected for 2024 a level of Gross Domestic Product (GDP) real 3.5% lower than the 2023 average, maintaining the perspective regarding the previous survey.

“The fall would have been concentrated in the first quarter, a period for which those responding to the REM estimated a seasonally adjusted quarterly reduction of 3.4% of GDP,” they estimated.

According to the forecasts received, the activity level It would stop contracting from the second quarter of the year and would begin to recover in the third, with a quarterly increase of 0.6%.

By 2025, the group of REM participants estimated an average growth of 3.4%.

In the fourth survey of the year, those who participated in the REM estimated a monthly inflation of 9% for April (-1.8 pp compared to the previous REM).

Inflation: What does the market expect for 2024?

For May they projected monthly inflation of 7.5% and for the year of 161.3% y/y (-1.5 pp and -28.0 pp in relation to the previous survey, respectively).

Those who best predicted this variable in the past (Top-10) expected inflation of 8.9% for April, 7.1% for May and 156.5% for 2024.

Regarding the Core CPI, the group of REM participants placed their forecasts for 2024 at 145.1%.

In the April survey, the group of REM analysts projected for 2024 a level of real Gross Domestic Product (GDP) 3.5% lower than the average for 2023, maintaining the perspective regarding the previous survey.

Meanwhile, those who make up the Top-10 projected, on average, a reduction of 3.7% for the year.

The fall would have been concentrated in the first quarter, a period for which those responding to the REM estimated a seasonally adjusted quarterly reduction of 3.4% of GDP.

According to the forecasts received, the level of activity would stop contracting from the second quarter of the year and would begin to recover in the third, with a quarterly increase of 0.6%.

By 2025, the group of REM participants estimated an average growth of 3.4%.

The open unemployment rate for the first quarter of the year was projected at 7% of the Economically Active Population (EAP), implying a reduction of 0.1 pp compared to the previous REM. For the Top-10, the unemployment rate would be 7.1% in the same period. The group of REM participants expects an unemployment rate of 7.6% for the last quarter of 2024.

Regarding foreign trade in goods, those participating in the REM estimated by 2024 that exports (FOB) will total USD 78,966 million and imports (CIF) USD62,897 million, correcting both downwards compared to the previous survey (-USD 1,876 million and -USD 2,265 million, respectively).

Source: Ambito

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