The consulting firms and financial entities that participated in the September REM reduced their devaluation expectations. The private sector expects more appreciation of the real exchange rate.
This Friday the Central Bank of the Argentine Republic (BCRA) published the Market Expectations Survey (REM) carried out during September. The consulting firms and financial entities that participated in it reduced their devaluation expectations both for the end of the year and for the next 12 months.
According to the median of the estimates, the average December dollar would be in the $1,021.50almost $4 below what was expected in the previous REM. This would imply an increase in 6.2% with respect to the average value of the official exchange rate in September, which was $961.81, a variation that is in line with the monetary authority’s current “crawling peg” strategy.
Likewise, City analysts cut their projections for the price of the wholesale dollar by $51 a year from now, which would be $1,279.20. So, The market expects that the real exchange rate will continue to appreciate since, while an exchange rate jump of 33% is foreseen, the expected inflation is 40.9%.
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REM: inflation and GDP
On the other hand, the private sector estimated September inflation at 3.5%. However, after the bad data in August, it now expects 2024 to close with a general price increase for the 123.6%that is, 0.8 percentage points more than in the previous survey.
Likewise, those surveyed confirmed their previous projections about the fall of the GDP for this year. In the new survey they predicted a collapse of 3.8%same level as in the previous edition.
“The fall would have been concentrated in the first semester. According to the forecasts received, the level of activity would begin to recover in the third quarter of the year, with an increase of 1.6% without seasonality,” said the BCRA. By 2025, the group of REM participants estimated an average growth of 3.5% year-on-year, very far from the 5% included by the Government in the 2025 Budget.
Source: Ambito
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