Country Insights

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​Back to the IMF
ARGENTINA - In Brief 08 May 2018 1 response
After last week’s measures to control devaluation expectations[1] president Macri announced today that the government has agreed with the IMF to retake conversation with the aim to negotiate a new Flexible Credit Line (current market talks go as high as USD 30bn).Treasury Minister Dujovne, who is...

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Loud and Clear
ARGENTINA - In Brief 04 May 2018 1 response
Today’s practically combined announcement of the Central Bank early in the morning and the follow up press conference of the "economic ministers" (Treasury Minister Dujovne and Finance Minister Caputo) intend to send a loud and clear message to the market: Despite (the anticipated) FX pressures, ...

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Higher-than-expected inflation is weakening the support for inflation targeting
ARGENTINA - Forecast 20 Apr 2018 1 response
The rate of inflation in the first quarter of 2018 has deviated significantly from the targets set by the Central Bank and the forecasts of most private consultants, ourselves included. The deviation was particularly large in March, and the online price indicator suggests that it will be even lar...

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The worst is over! Is it?
ARGENTINA - Report 29 Mar 2018
In President Macri´s speech during the opening of the congressional session, he stated that the worst (of the economic reforms) is over, and that the government has set the foundations for sustained growth. He recently implied as much when he announced the decline in poverty and unemployment. In ...

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December EMAE confirms 2017 GDP growth below 3.0% - No GDP Warrant payment in 2018
ARGENTINA - In Brief 28 Feb 2018
The INDEC published today the monthly GDP proxy (EMAE) for the month of December 2017, with an annual growth rate of 2.0%y/y. With this result the 12-month-moving growth projection climbed from 2.7% in November to 2.8% for 2017 as a whole. Therefore the preliminary GDP result falls short of the 3...

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The government can still reverse the boomerang effect on expectations of the new inflation target
ARGENTINA - Report 07 Feb 2018
Heightened uncertainty about monetary policy after the change in the inflation target has increased expected inflation for 2018; however, the government can still reverse the undesired effect of this new inflation target (15% per year), announced on December 28. The President of the Central Ba...

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Stronger than expected opposition downplays growth optimism
ARGENTINA - Forecast 16 Jan 2018 1 response
Negotiations with governors and trade union leaders during November and discussions in Congress during December proved to be more difficult than anticipated in our previous quarterly report.​ Several desirable features of the tax and labor reforms had to be abandoned or postponed. Instead, the...

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Sweet and Sour Year End
ARGENTINA - Report 29 Dec 2017
The year closes with a mix of good and bad data and news. Politically, the government managed to pass its economic agenda through Congress (tax reform, fiscal responsibility, transfer to provinces, social security, financial transaction tax and 2018 budget ), with the support of the traditional P...

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​Political power struggle at year end
ARGENTINA - In Brief 27 Dec 2017
Wednesday night the Government managed to close the year with the approval of the remaining three economic bills which were debated until late night in the Senate. These are: 1) the 2018 budget, 2) the tax reform and 3) the extension of the financial transaction tax. These three laws, together wi...

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Political reading of Cristina’s imprisonment request
ARGENTINA - In Brief 08 Dec 2017
On Thursday December 7th, Federal judge Claudio Bonadio (who is about to retire) requested the Senate to annul the Congressional immunity of recently sworn-in senator Cristina Fernandez de Kirchner (CFK) and ordered her subsequent detention. This request came together with the actual detention (a...

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Expectations improved after the post-electoral announcements
ARGENTINA - Forecast 06 Nov 2017
After winning the mid-term election, President Macri outlined his future policies in a short and clear speech on October 30, 2017. He announced that his government will pursue policies aimed at reducing poverty, opening the Argentine economy to the world, fighting inflation and reinvigorating gro...

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Is the monetary bet going sour?
ARGENTINA - Report 20 Oct 2017
Much of market’s attention will be focused on this Sunday’s midterm elections and the likely political implications of the reshuffling in Congress, in particular, the new political balance ahead of the 2018 budget approval or the announced labor and tax reform. The electoral battle in the Provinc...

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September tax collection remains up-beat, despite mild softening in growth
ARGENTINA - In Brief 03 Oct 2017
In September, total tax collection reached AR$1.9bn, growing 33.1%y/y, quite in line with the accumulated yearly growth (Jan to Sep) of 31.4%y/y. Although the annual rate declined somewhat with respect to the 33.5%y/y observed in f August, it still remains significantly stronger than inflation an...

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Tense politics yet improving activity
ARGENTINA - Report 08 Sep 2017 1 response
After relatively positive results for the government in the recent primary elections, the political heat ahead of the actual midterm elections is increasing, with particularly harsh cross-fire between Cambiemos and the Kirchnerists. In what seems to be an attempt to shift public focus away fr...

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​A better than expected tie with improved political outlook
ARGENTINA - Report 14 Aug 2017
Cambiemos (Macri’s governing coalition) managed a somewhat better than expected result in the primary election for senator in the province of Buenos Aires. This is quite an achievement considering that the relatively unknown Esteban Bullrich competed against political heavy weights such as Cristi...