Growth is Beautiful. Can Energy and Inflation Spoil the Party?
Can anything go wrong? The performance of the Argentine economy continues to surprise everybody as the growth numbers consistently outperform expectations. The most recent indicator of economic activity, corresponding to July 2006, shows that the economy is growing at 9.3% per annum, and that it increased 1.0% relative to last month. These numbers imply a slight […]
The burden of the Debt is Falling despite Worse Fiscal Accounts
What”s new? Not very much. The Argentine economy continues to generate positive data. Recorded inflation in July was only 0.6%, at least three tenths of one percent lower than market expectations and now accumulates 10.6% over the last year. This reduction in inflation is taking place although nominal wages are increasing at roughly 20% while […]
A shift in Exchange Rate Policy?
The most recent economic indicators continue to show that the economy maintains its strength and that growth this year will be at least 7.5%. Industrial production increased by 0.9% in June and accumulates a rate of growth of 8.9% in the last twelve months; construction grew 2% in June and almost 24% in the last […]
A balance of three years of Penguinomics
The first three years of the Kirchner administration have been a combination of unconventional economic policies and a unique management style on the one hand and a very solid economic expansion that has exceeded most analysts expectations on the other. This strange combination of unconventional policies and solid macroeconomic outcomes has raised numerous questions. Are […]
The new reality of the banking system
The banking system is back in business and it has left behind most of the adverse effects of the 2001/02 crisis. Banks are focusing on their core business and this is started to be reflected in higher volumes of financial intermediation, as lending to the private sector has increased by 14,4 billion pesos, while they […]
When Beef meets Macro
The economic outlook remains positive, as growth continues and consumer confidence remains high. We continue to expect a slow deceleration of the economy, but very gradual and with a forecast of 7% increase in GDP for this year. The mixed indicators of economic activity in January do not indicate a change in trend, as they […]
A calm beginning for 2006
The year 2005 ended with lots of excitement on the macroeconomic front. Minister Lavagna was fired and replaced by Felisa Miceli, the government paid back the IMF in what looked as a challenge to the holdouts and the bondholders that accepted big discounts in the debt swap, while the peso depreciated to the lowest levels […]
Argentina: Highlights of 2005 and the Outlook for 2006
In many ways Argentina had a great economic performance in 2005. It restructured the public debt, the economy grew one more time at around 9% per year achieving one of the highest rates of growth in the region, investment increased by 20%, exports reached a historical high level growing by 15% mainly thanks to increases […]
Perspectives on the Monetary Program and the External Sector
Strong economic indicators still but questions about the future. The recent changes in the Ministry of the Economy take place at a time when the economy is showing a strong growth performance and very robust macroeconomic fundamentals (such as the large budget and current account surpluses). Growth this year is going to end in the […]
Another look at Inflation
The economy is now reaching a point where high growth could be seen as a mixed blessing. What used to be good news it is now becoming a boomerang as it is increasing the inflationary pressures. And this is happening when inflation is running at 12% per year, without showing any signs of receding and […]