He Central Bank of the Argentine Republic (BCRA) released estimates of the Survey of Market Expectations (REM) for the month of April, in which they estimated how much the dollar will be worth at the end of the year. In addition, another report from a consulting firm was released, also based on market gurus who gave their projections.
According to the REM, end of the year Specialists predict an exchange rate of $1,300 per dollar. This is a new reduction in the estimate, since Previous forecasts suggested that next December, the official exchange rate would be $1,438.3, which was already $172 less than previous estimates.
The Market Expectations Survey (REM) is a fundamental tool to closely monitor macroeconomic projections in the short and medium term. In the latest report published by the Central Bank, the opinions of 37 participants are collected, including consulting firms, research centers and financial entities, both local and international, providing a comprehensive vision of economic expectations for Argentina.
For its part, the consultancy FocusEconomics also shared its projections for the dollar, which indicate that the consultancy expects the peso to continue weakening against the dollar, although with an acceleration of the current crawling peg that would take the official exchange rate to $1,549.2 by the end of the year.
With respect to Dolar bluethe report also believes that there will be aacceleration in the rate of increase of the currencyalthough also will fall behind inflation. According to the survey, the parallel currency would exceed $1,800 in the fourth quarter.
Taking into account the current price, the blue dollar would increase, according to the consulting firm, by around 75%. According to its inflation projections, this increase would be far behind the price increase, which would close 2024 at 272.3%.
REM: What do you see the market for 2024?
The Market Expectations Survey (REM) of the Central Bank (BCRA) reported that inflation for April is estimated at 9% and for May at 7.5%, below previous perspectives.
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 real Gross Domestic Product (GDP) 3.5% lower than the average for 2023, 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 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%.
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).
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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