The New Offer: What can we Expect?
Possible dynamics of the negotiation and the impact on the economy. The debt saga is entering a new, critical phase where most people expect that the government will finally restructure its foreign debt. This week the government has filed the offer at the SEC, and the road show is expected to start as soon as […]
Debt Restructuring: Getting to Yes
Suddenly, there seems to be a change in the investors mood and there is now a feeling that a deal on the debt is possible. Of course, there is still significant uncertainty, and there are numerous risks which leaves room for skepticism. For instance there are still questions about whether in the end the government […]
The Economy Waiting for Critical Signals
Most recent indicators confirm that the economy is slowing down, perhaps faster than most analysts were anticipating. The index of economic activity experienced the first reduction since the first quarter of 2001, while industrial production, despite some fluctuations, remains at the levels of January of this year. Consumption is also starting to slow down. The latest […]
More Difficult Times but no Crisis in the Horizon
The Argentine economy continues to have strong monetary and fiscal stances. Increases in tax revenues provide oxygen to the treasury, and inflation remains within the targets of the monetary program. The external position is comfortable as central bank international reserves exceed 18 billion dollars. While there has recently been a small depreciation of the Peso, […]
The Economy after the Buenos Aires Offer
The Buenos Aires offer represents an important increase in NPV terms over Dubai, and brings the offer closer to market values. Nevertheless, it seems unlikely that the current offer could achieve a 70% acceptance rate and there will be a need for additional changes. One of the options would be to substitute a cash payment […]
A Turning Point for Growth and Debt?
The economy is slowing down as the rebound is losing strength and the external environment deteriorates. Recent data has provided more evidence that the economy is at a turning point as growth is slowing down and inflation is on the rise. By and large these outcomes are explained by domestic factors, despite the recent turbulence […]
Argentina: Recent Developments and the Fiscal Outlook
The government is starting to face the end of the honeymoon period. The energy crisis, the increasing problems with personal security, and the need to sanction a new tax coparticipation law are complicating the policy making process in the government. So far, the government hoped that time would solve many of the issues. This strategy […]
Argentina: Debt, the IMF and Beyond
The approval of the second tranche of the IMF agreement was preceded by tense negotiations and the threat of a breakup in the relations. Both parties are likely to continue to make efforts to maintain the program, but if there is not significant progress in the negotiations with private creditors by September the G-7 is […]
A look at the Banking System: Current Situation and Perspectives
In the second half of 2003 there was an important improvement in the banking system. It managed to restore liquidity, it showed signs of a return to profitability and there was a the persistent fall in loans to the private sector came to an end. Looking forward, it seems that the banking sector could generate […]
The prospects for 2004 and a review of recent economic performance
Our base case scenario indicates growth around 7.2 percent in 2004, investment reaching 15 percent of GDP, consumption growing at 7.4 percent, a large increase in imports (close to 30%) and a current account balance surplus of 4.9 billion dollars. Inflation is likely to reach 8 percent, and will stay within the inflation target set […]