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The Central Bank released its first report on market expectations with inclusive language


This is the July report, which includes the diagnoses prior to the agreement with the bondholders. Less inflation, a more expensive dollar and more fiscal deficit are expected.

08/07/2020 - 20:29

  • Clarí
  • Economy

The Central Bank of the Argentine Republic (BCRA) released on Friday its first Market Expectations Survey (REM) with inclusive language, as approved by the board of the monetary authority to contribute to the "construction of a fairer society."

The publication noted that the use of "a language that does not discriminate and that allows all gender identities to be made visible is an institutional commitment of the Central Bank of the Argentine Republic."

"At the same time, those of us who have made this publication recognize the influence of language on ideas, feelings, ways of thinking and valuation schemes," they added.

They then clarified that this REM "has tried to avoid sexist and binary language" but "in order to facilitate reading, resources such as '@' or 'x' are not included" and "the original forms of writing of the cited texts ".

"At the end of July, market analysts projected that retail inflation for December 2020 will be at 39.5% year-on-year, decreasing by 1.2 percentage points (pp) the forecasts provided at the end of June" , they indicated in the REM.

They added that "those who best predicted this variable for the short term (TOP-10) expect an average inflation of 37.5% yoy, implying a slight increase of 0.3 pp compared to what was projected by that group during the previous survey."

Regarding the evolution of the economy, "those who participate in the REM expect a contraction of the real Gross Domestic Product (GDP) for 2020 of 12.5 (implying an additional projected fall of 0.5 pp compared to the previous survey)".

"Although in relation to the previous survey, the expectation of a seasonally adjusted quarterly contraction of GDP for the second quarter of the year deepened (to -17.0%), those who participate in the REM forecast a greater expansion of activity for the third quarter of 2020 (8.0% se), foreseeing that the level of economic activity will continue to increase during the last quarter of the year (6.0%), which indicates that the period of greatest impact of the pandemic would have already been overcome ", highlighted.

The report also indicated that in the market they foresee "that the average nominal exchange rate will reach $ 86.4 per dollar in December 2020 (- $ 1.6 per dollar compared to the previous REM) and they adjusted their monthly projections downwards, considering to reach $ 123.2 per dollar by the end of 2021. "

Finally, those participating in the REM increased the projection of the primary fiscal deficit for 2020 to $ 2 billion (a deficit $ 254 billion higher than the last REM).

For 2021, they forecast a deficit of $ 1,417 billion. The average of those in the top 10 most accurate forecasting this variable indicates a projected deficit of $ 1.957 billion for 2020.


Source: clarin

All business articles on 2020-08-08

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