Country Insights

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​Inflation will remain high and the recovery weak in 2022, even if the government can avoid another debt default
ARGENTINA - Forecast 19 Jul 2021
Any economic forecast for the Argentinian economy needs to start by assessing the possibility of avoiding another debt default over the next two years. A default on the dollar-denominated debt would adopt the form of going into arrears with the IMF, thereby blocking the possibility of accessing f...

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Three economically dangerous electoral weapons
ARGENTINA - Report 23 Jun 2021
In an increasingly hostile social and political climate, the government has started to worry about the coming electoral events. These include the simultaneous and obligatory open primaries (PASO, Primarias Abiertas Simultaneas y Obligatorias) on September 12 and the midterm election on November 1...

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Electoral politics may induce a default on IMF debt despite a significant improvement in the fiscal and external accounts
ARGENTINA - Report 03 Jun 2021
Unexpectedly, the fiscal accounts came in significantly better than projected in the 2021 budget. The primary deficit during the first four months was 192 billion pesos, which represents only 12% of the primary deficit budgeted for the year. This result was the consequence of an impressive 93% in...

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Winter is coming - a quantitative review of COVID
ARGENTINA - Report 05 May 2021
Over the last year, we have been analyzing the economic and political impact of the pandemic, anticipating the scope of this global shock on the local economy. In this report, amid a severe second wave, with an erratic vaccination program being implemented, we add a complementary question: How mu...

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Second wave of infections aggravates social and political conflict
ARGENTINA - Report 19 Apr 2021
The decision of the Economic Minister in February to slow the pace of devaluation on the official exchange market in order to reduce the rate of inflation has failed so far. Actually, in March the rate of inflation jumped to 4.8% from 3.6%, and some early indicators show that it is not falling in...

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Slower rate of devaluation to repress inflation
ARGENTINA - Forecast 04 Mar 2021
The recovery of the economy since May 2020, after the sharp decline of the previous four months, was faster than previously forecast. In November we had forecast a decline of 12%, similar to the decline estimated by the government in the presentation of the 2020 Budget to Congress. In 2020, the a...

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​Alberto Fernandez's Kirchnerist speech during the opening session of Congress
ARGENTINA - Report 03 Mar 2021
President Alberto Fernandez (AF) gave a long yet carefully structured speech during the Congress’s opening session. He reviewed his government’s achievements, defended it from what he called “malicious criticism that responds to unspeakable interests of concentrated economic powers”, and made sev...

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​January Trade Balance surprised on the upside
ARGENTINA - In Brief 01 Mar 2021
Most market attention will be set today on Alberto Fernandez’s speech during the opening sessions of Congress, which is expected to happen at noon, local time. This said, in this opportunity, we would like to review January’s trade balance published Friday afternoon. Even though the December to F...

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​Government launches Economic and Social Council
ARGENTINA - Report 23 Feb 2021
Last Friday, President Alberto Fernandez announced the formal creation of an Economic and Social Council (ESC). It had been part of AF's political promises at the onset of his mandate but was delayed by the pandemic’s urgency. This interdisciplinary body, presided by National Secretary of Stra...

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Rising inflation: King Canute´s new tide
ARGENTINA - Report 12 Feb 2021
The government’s attempt to stop inflation with price controls, export regulations and wage agreements, while simultaneously financing the fiscal deficit with expanding monetary aggregates and rising BCRA debt, reminds us of the legend of King Canute and his futile order to the sea, to stop the r...

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​"Cristinomics" conditions the IMF negotiations
ARGENTINA - Report 31 Jan 2021
The government has always been vague regarding the economic model it has in mind or how it would achieve its goal of simultaneously supporting domestic consumption while remaining a competitive exporter. In short, how can it spur domestic absorption while seeking a balance of payment inflows to f...

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The president’s lack of leadership, and the VP’s authoritarian and leftist stance, feeds economic pessimism
ARGENTINA - Report 23 Dec 2020
Key health and economic indicators published after we posted our last Quarterly forecast show some improvement. The number of COVID-19 infections fell in November, and the first two weeks of December. GDP and employment preliminary estimates by INDEC for Q3 show a stronger-than-expected recovery....

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Argentina 2021: a slow recovery and higher inflation
ARGENTINA - Forecast 27 Nov 2020
Our forecast for the Argentine economy in 2021 differs significantly from the official forecast in the 2021 Budget Law. We forecast a slower recovery of GDP growth and a significantly higher rate of inflation than that projected by the authorities. At the same time, we expect a slightly lower pri...

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​Supreme Court bows to the executive power
ARGENTINA - Report 04 Nov 2020
Amid the US election, which is attracting most of the media attention, Argentina’s Supreme Court ruled in favor of the government’s interests regarding the validity of the transfers of two judges who ruled against Vice President Cristina Fernandez de Kirchner (CFK). A third judge who is still dec...

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Dangerous monetary arithmetic, version 2020
ARGENTINA - Report 26 Oct 2020
Capital markets remain concerned about Argentina’s economic and political outlook, despite the successful international debt swap and the more recent oversubscribed domestic dollar-linked debt placement. The failure of the long-term lockdown to avert the spread of the COVID virus and the conseque...