He Central Bank of the Argentine Republic (BCRA) released estimates of the Survey of Market Expectations (REM) for the month of May. These are the forecasts of the main private consulting firms on the evolution of the dollar, inflation, interest rates and growthamong other variables.
Regarding the exchange rate, Specialists predict that it will close the year at $1,174.70, that is, 30% more than current levels, and an advance of 45.3% throughout 2024.
exchange rate 2 rem May 24.jpg
This is a strong and new drop in the estimate, since Previous forecasts suggested that by the end of next December, the official exchange rate would be $1,300 (that is, they adjusted it downwards by $125.30).
The median of the REM nominal exchange rate projections was $904.30 for the June 2024 average, which would imply an average monthly increase of 2.0% in the exchange rate. For the Top-10, the expected average nominal exchange rate for June is $906.40.
exchange rate 1 rem May 24.jpg
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.
May REM: inflation will stagnate above 5% in the next 4 months
City analysts’ inflation projections were cut again, according to the REM. Now, consultants predict that the rate of consumer prices (CPI) will close 2024 with a year-on-year increase of 146.4%that is to say, 15 points less than in the previous survey. However, the REM revealed a challenging scenario: Starting in June, the monthly slowdown will stop.
The median of the projections of the analysts consulted by the BCRA for May showed a considerable decline. Now, the City consensus expects monthly CPI of 5.2%. This is 2.3 points less than what the same respondents had predicted a month ago. This would mark a new monthly slowdown in the CPI since for April the INDEC reported an index of 8.8%. The official data for May will be known next Thursday.
However, not all of it is good news for a Government that seeks to show the continued slowdown in inflation as a triumph. According to the REM, this process would have already been stopped, as suggested by the high-frequency measurements of several consulting companies in their measurements in recent weeks.
It happens that the BCRA survey recorded an average forecast of 5.5% for the June CPI. If confirmed, this would imply a rebound of the monthly indicator for the first time so far this yearafter December’s inflationary flash (triggered by the megadevaluation) was followed by downward measurements.
It should be noted that the Central survey was carried out between May 29 and 31, that is, before the new rate increase that will impact inflation this month was made official.
