The IMF Meeting in Washington: Concerns about the world and still little interest in Argentina
We attended the IMF meetings that took place in Washington in mid-October. The main theme was world inflation, where the discussions centered on whether the burst of world inflation was just caused by temporary supply shocks due to the pandemic and the war in Ukraine, or in if instead it was mainly driven by the […]
Massa: good start, same challenges
Massa has been almost two months commanding the economy, and the results so far have been mixed, though probably better in some important respects that one could have expected. The challenges remain large, because they were significant in the first place, especially on the external front (including the exchange rate and reserves) and on inflation, […]
New Minister, old problems, same policy dilemmas
This has been a hectic period in Argentina. Minister Batakis had a short interregnum in which she made the right announcements, but markets did not believe she could deliver. The currency depreciated sharply in the free markets, Argentinas country risk increased, and the government became nervous. After just three weeks in her position and a […]
Time of courageous decisions to avoid a full-blown crisis
Batakis takes over the Ministry of the Economy at an extremely difficult time. Reserves are at a critical level, as they just cover less than two weeks of imports, inflation is accelerating, and the parallel exchange rates seem to be out of control. If we add to these problems a fiscal deficit that far exceeds […]
Government coalition in turmoil
The economic and political situation continued to deteriorate in recent weeks. Cristina Kirchner escalated the confrontation with Alberto Fernandez in two speeches in which she criticized once again the agreement with the IMF, and especially the effectiveness of the policies to preserve international reserves and to deal with inflation. Cristina believes in controls, and her […]
Politics Complicate an Already Complex Economic Situation
The IMF program triggered a conflict within the government coalition between the populist and more orthodox sectors. The key differences are the importance that each of then attach to the targets set in the IMF program. Targets require tighter monetary and fiscal policy, and the difference in the approach to deal with inflation, where the […]
Three shocks threaten the fragile economy
The IMF agreed to a light program with Argentina that could easily be criticized for its lack of scope and depth. It seems that it was a set of policies that represented the minimum common denominator between the demands of the IMF and what the Government offered. Fortunately, it was not an empty set, though […]
An IMF program that nobody likes but everybody needs
The IMF program was finally approved by Congress, though at a heavy cost for the government because Cristina and the Campora opposed it. Fernández had to rely on the opposition for the approval in Congress and had a setback regarding the law because the opposition was only willing to vote for the new IMF financing […]
A mild IMF agreement that serves a purpose
There will not be a default with the IMF and the agreement seems to be around the corner. Despite some political noise from the Campora and other radicalized sectors of the government coalition, it seems that there will be a program and that the worst possible scenarios will be avoided. However, this will be a […]
A critical moment of the IMF Saga
All eyes are now focused on the IMF program. The clock is ticking, and the bets are on whether Argentina and the Fund can reach an agreement by March 22nd. The government has been sending clear signals that it wants to avoid a default with the Fund. Foreign Minister, Santiago Cafiero, traveled to Washington to […]