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Growth at Last
ARGENTINA · Report · 07 Jun 2017

Chief of Cabinet Marcos Peña might have been in a hurry to announce some still-unpublished news. But despite his politically-driven urgency, in the run-up to the October midterm elections, he seems to be right. Though April activity data still shows mixed results, the general economic picture has...

​Improving Q1 activity data combines with falling trade balance
ARGENTINA · In Brief · 24 May 2017

INDEC’s monthly activity indicator (EMAE) reported yesterday a 0.8%y/y growth rate, for the month of March. With this result, the 1stQ17 GDP proxy closed with a rise of 0.2%y/y, the first growth rate since the 1stQ16´s 0.6%. It also compares positively to the a contractions of -2.1% in the 4thQ16...

Better foreign financial conditions may slow the pace of reforms
ARGENTINA · Forecast · 05 May 2017

Contrary to what we expected in January, the perception of a high risk of a sudden stop in foreign financing before the end of Macri’s first presidential term is being downplayed in the official circles. As a consequence, the economic authorities are not compelled to prepare a plan to speed up th...

​BCRA tightens again monetary policy, will the economy stand the pressure?
ARGENTINA · In Brief · 12 Apr 2017

In Yesterday’s Monetary Policy Meeting, the BCRA decided to raise its reference rate by 150bps. It maintained the 75bps spread around it to define the 7 days active and passive repo rates. This represents the first hike since February 2016 and brings the reference rate back to where it was in Nov...

Peso appreciation is worrying the government but not the Central Bank
ARGENTINA · Report · 07 Apr 2017

Inflation seems stuck at monthly rates slightly above the target set by the Central Bank, and the economic recovery still appears fragile. Kirchnerist opposition to the government has taken advantage of the social discontent to promote riots, strikes and street blockades in Buenos Aires and other...

Building Fiscal Credibility
ARGENTINA · Report · 10 Mar 2017

As we leave behind the more leisurely summer months of January and February, economic and political activity returns to a more vertiginous path. President Macri’s Address to the Nation, at the opening session of Congress on March 1, and Treasury Minister Dujovne’s presentation of new quarterly fi...

The fear of tighter financial conditions will encourage better post-election economic policies
ARGENTINA · Forecast · 31 Jan 2017 · 2 responses

The appointment of Nicolas Dujovne to replace Alfonso Prat Gay as Minister of the Treasury does not signal a fundamental change in economic policy. But it looks like the new minister will put more emphasis on fiscal consolidation and will draft a tax reform to be implemented in 2018. Dujovne w...

Two Holiday Gifts
ARGENTINA · Report · 30 Dec 2016 · 1 response

Santa brought Argentina two Christmas gifts: a promising reduction in the monthly inflation rate, and an impressive outcome for its tax amnesty plan. The fall in monthly inflation will permit two policies that may favor economic activity recovery, and provide fiscal support to the Central Bank...

​Coalition member Prat-Gay is replaced by Macri’s Men
ARGENTINA · In Brief · 26 Dec 2016

Macri requested Prat-Gay´s resignation today’s. The chief of cabinet, Marcos Peña, also announced that the former Ministry of the Treasury and Finance (Ministerio de Hacienda & Finanzas) will be split in two. On one hand, there will be the Treasury or Ministry of Fiscal Affairs (Ministerio de Hac...

Signs of Growth Dissipate, as the Macro Picture Darkens
ARGENTINA · Report · 06 Dec 2016

Herein we analyze the mounting economic pressures the government faces toward yearend, and in the runup to the October 2017 midterm elections. In our October 3rd report, we pointed out that while Q2 activity and external data were negative, higher frequency indicators for August suggested the...

Inflation still above 20% in 2017, but better prospects for 2018
ARGENTINA · Forecast · 28 Oct 2016

This quarterly report tries to answer the questions most frequently asked by prospective investors in the Argentine economy: 1. Will Macri’s government deepen the fiscal and pro-market reforms before the mid-term elections to take place in October 2017? 2. If, without deepening the reforms, the...

Growth Would Address Fiscal and Monetary Imbalances
ARGENTINA · Report · 04 Oct 2016

This report covers three interlinked macroeconomic issues: a) the deterioration of the fiscal balance; b) the monetary impact of that deficit on Central Bank inflation targets, and the Bank’s modification of the reference rate; and c) whether high-frequency activity data sends hopeful signals for...

INDEC’s Renaissance Affects the GDP Warrant
ARGENTINA · Report · 01 Sep 2016

The National Statistical Bureau (INDEC) is gradually regularizing its flow of statistical information, and thereby emerging from the catatonic state into which it had fallen when the Macri administration began revising its methodologies, after years of misreporting statistical data. June’s mo...

Unleashing repressed inflation feeds inertial inflation and delays recovery
ARGENTINA · Forecast · 01 Aug 2016

Macri’s government inherited an economy with large macroeconomic disequilibria and extreme relative price misalignments. The disequilibria and misalignments created by capital and price controls and inefficient regulations distorted the functioning of most markets for goods and services. The n...

Tax amnesty in a volatile environment
ARGENTINA · Report · 30 Jun 2016

Congress has finally approved the government’s broad-based legal bill, which incorporates changes in the social security and tax systems. The new law, called the "exceptional voluntary reporting system of tenure of national and foreign currency and other goods, locally and abroad” incorporates t...