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High inflation dampens news that Senate Commission approved treatment of IMF agreement
ARGENTINA · In Brief · 16 Mar 2022

As anticipated, the Senate Committee on the Budget approved yesterday that the IMF agreement will be sent to the upper house to be voted on tomorrow, Thursday. The political support was ample, with 15 votes in favor and only 2 dissidents. As said before, such a pragmatic position of the Committee...

​A step towards financial consolidation
ARGENTINA · In Brief · 11 Mar 2022

As anticipated in our last report, with 202 votes in favor, 37 against, 13 abstentions, and 4 absentees, the Chamber of Deputies gave, at the early hours of today and after a 13-hour-long debate, a half sanction to the law that approves the financing of the recently negotiated Extended Fund Facil...

Some interpretations ahead of the IMF debate in Congress
ARGENTINA · Report · 07 Mar 2022 · 1 response

Last Friday, after some back-and-forth between the government and the main opposition regarding the final wording of the bill that will be debated this week in Congress, the full IMF agreement was finally presented to the Lower House and thereby disclosed to the public. Despite the frictions we d...

​Alberto Fernández's opening speech at the Congress
ARGENTINA · In Brief · 01 Mar 2022

Today, at the opening session of Congress President Alberto Fernández (AF) gave the traditional Address to the Nation, which is always worthwhile analyzing. As usual for such an occasion, AF was accompanied by Vice President Christina Fernández de Kirchner (CFK), in her role as President of the S...

The recovery will slow, but at least an inflationary explosion can be avoided
ARGENTINA · Forecast · 10 Feb 2022

​After long negotiations, the staff of the IMF and Minister Martín Guzman reached an understanding on the path for the primary fiscal deficit and the monetary assistance of the Central Bank to the Treasury that will be the core of a program. The government hopes the program will be supported by t...

​First impressions on the announced EFF structure
ARGENTINA · In Brief · 28 Jan 2022

The government confirmed in two separate presentations that Argentina had reached an agreement with the IMF. First, in a recorded speech, President Alberto Fernández gave a primarily political message, which seemed directed at reassuring his Kirchnerist allies. In a follow-up press conference, he...

Agreement with the IMF finally in sight?
ARGENTINA · In Brief · 27 Jan 2022

At the close of yesterday’s newspapers, the local press announced that Argentina had reached an agreement with the IMF and that it would be officially announced later today, Friday, Jan 28. Even though we would prefer to read the actual agreement to give a more reasoned opinion, if confirmed, thi...

Dusting off output gap calculations
ARGENTINA · Report · 24 Jan 2022

There is no guarantee that an economy with excess capacity will grow. Leaving aside 2020, Argentina has not systematically grown over the last 10 years, despite significant excess capacity. But the currently estimated output gap of approximately 20-24%, in combination with rising commodity prices...

January starts with bad news
ARGENTINA · In Brief · 13 Jan 2022 · 1 response

Consumer price inflation in December was 3.8%, up from 2.5% in November, and the prospects for January are still worse. The monetary base has been expanding at 12% per month since the beginning of December. The Central bank has increased the interest rate and the pace of adjustment of the officia...

Argentina ends 2021 in an economic quagmire
ARGENTINA · In Brief · 29 Dec 2021

The level of economic activity has recovered from Covid 19’s deep fall during 2020, and the rate of unemployment went down, restoring to the level of the third quarter of 2019. However, inflation is ending the year as high as in 2019. These macro indicators do not show the more worrisome aspect o...

Some initial consequences of the political power shift in Congress
ARGENTINA · In Brief · 17 Dec 2021

Both the Supreme Court’s declaring the reform of the Council of the Magistracy unconstitutional and the Lower House’s rejection of the 2022 budget are two clear signals of the power shift in the Congress after the mid-term elections.Although the underlying risk is that of a radicalization of the ...

Forecast revisions after the mid-term elections
ARGENTINA · Forecast · 22 Nov 2021

The defeat of the government coalition in the midterm elections seems to have encouraged President Alberto Fernandez to pursue an agreement with the IMF. He probably considers that going into arrears with the official creditors will affect governance in the two remaining years of his mandate, whi...

​A harsh electoral defeat for the government
ARGENTINA · In Brief · 15 Nov 2021

With 98.5% of all polling stations scrutinized, there is no doubt that Sunday’s mid-term elections were a harsh defeat for the governing coalition, formed by traditional Peronists and Kirchnerists. In line with the September primary election, the ruling coalition “Frente de Todos” (FdT) obtained ...

​The conditioned Pavlov response
ARGENTINA · Report · 02 Nov 2021

As expected, and yet imprudently, the government’s economic direction further embraced the Vice President´s “textbook” recommendations after the adverse results in the September primary elections. Like a conditioned Pavlov response to the stimulus of an anticipated electoral defeat, the governmen...

Worries on inflation overshadow the strength of the recovery
ARGENTINA · Report · 18 Oct 2021

In the weeks immediately before the primary elections, the government thought that a stronger-than-expected economic recovery would favor its electoral chances. But the results proved otherwise as inflation overshadowed the strength of economic recovery. In spite of the clear evidence that inflat...

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