Crisis management

ARGENTINA - Report 10 Sep 2018 by Esteban Fernández Medrano

These days, Macri´s administration has faced its second significant market run against the peso since the devaluation in May, which forced it to accelerate its macroeconomic convergence plan. This comprises reversing the excessive debt levels of the Central Bank and improving the poor fiscal outlook.

In doing so, Macri is walking a narrow path in which he must balance the need to implement costly economic adjustments while avoiding depleting his political capital, or at least doing so at a speed at which he avoids significant social unrest and maintains the hope of recovering ahead of the October 2019 presidential election.

While the market expects news from the current IMF renegotiatons and Macri´s political ability to close the 2019 budget with the opposition, the sense that remains is whether at such high FX rates, it might not be the time to take the risk of investing in peso assets.

In this report, we review the behavior of those macro variables and the economic policies that are being implemented.

Now read on...

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