Market Expectations Survey (REM), August 2023

By the end of August, market analysts reported that they expected a stable foreign exchange rate until October. The projected nominal exchange rate stood at around ARS350/USD, as it had been announced after the adjustment on August 14.

Analysts expect a gradual adjustment of the interest rate in the following months. Based on the REM, it is forecast that the monthly BADLAR interest rate (effective monthly interest rate of time deposits) will be 9.3% in September and 9.5% in October.

Monthly inflation in August exceeded REM forecasts. August's inflation rate turned out to be higher than the REM forecast (+0.66 p.p.). Market analysts expect that the monthly inflation rate will moderate at around 9.1% in October after the 12% inflation rate expected for September. The analysts surveyed project a year-on-year inflation rate of 169.3% in December.

Analysts surveyed continue expecting a fall in GDP of around 3% for 2023. GDP was particularly affected by the impact of the drought during the second quarter of 2023. Nonetheless, unemployment is expected to remain close to the current historically low levels.

• As for the other variables, no significant changes were observed in market expectations.

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September 13, 2023

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