Recent Economic Developments: Glass Half Empty or Half Full?
The recent news on the economic front has been overall good. The recovery remains on track in line with the normalization of mobility indicators and a gradual reopening of different business that were affected by Covid-19. The parallel exchange rates remain calm, interest rates have stayed relative stable despite the rise of inflation, fiscal revenues are […]
External Tailwind, Intervention, and the IMF: An Impossible Trinity
What a difference a month can make: The game changer has been the rapid and significant increase in the price of soybean, which now stands at around 506 dollars a ton, roughly 50% higher than a year ago. This jump in the price has suddenly soothed the concerns about a continuous drop in reserves and […]
The Spring Brought Some Oxygen, but a Hot Summer is Ahead
The 2021 midterm elections are starting to affect day to day decisions and can have an impact on the economic develo pments. The starting point is worrisome for the government because the poverty levels exceed 40% and there are no signs that they are receding, the economic recovery is losing steam and there is no […]
High Hopes on an IMF Program, But the Task Aint Easy
The change of guard in the United States is unlikely to change significantly foreign policy towards Argentina. We do not expect softening policies in the IMF as a result. There could be some benefit from a weaker dollar and therefore a rise in the price of commodities. Soybeans have surged in the last months and […]
The Wrong Treatment for the Wrong Diagnosis
As time goes by the economy seems to be getting deeper into a hole: the government continues to be haunted by the record levels of the alternative exchange rates, the persistent drop in international reserves and the increase in the country risk as measured by the EMBI. In the meantime, the sanitary situation is deteriorating […]
Old Recipes for Old Problems
On the back of the debt exchange the government had an opportunity to jumpstart the economy. But Argentina is the country that never misses an opportunity to miss an opportunity. The government was expecting that the deal would be a turning point, which in turn would help to reduce the spread with the blue-chip swap […]
Good Bye Debt, Hello IMF
Finally, and just when the negotiations appeared to be falling apart, the government announced an agreement with the three main groups of bondholders that should lead to a successful restructuring of the sovereign debt. By the time these groups agreed, roughly 40% of the bondholders had already accepted the offer. The three groups represent another […]
Waiting For An Economic Script
The government finally seems to be approaching an agreement with the main bondholders on the debt and it is also relaxing the lockdown. The big question now is how the economy will perform in the new environment, as the economic challenges are still enormous and the policy tools limited.
Surfing the Covid-19 and the Debt Restructuring
While many Asian and European countries are slowly returning to normal, the focal point of the Covid-19 pandemic has shifted to the Americas. The United States economy has buckled under the sanitary crisis with over 25 million jobs lost in two months and unemployment reaching Great Depression levels, amid ongoing conflict between federal and local […]
Deficit, Debt & Inflation: A 2020 vision
The sanitary emergency caused by the novel Coronavirus has thrown the world into disarray, crashing international markets and putting governments to the test. To face the inevitable recession, most developed countries have announced historical fiscal and monetary stimulus packages. Their Latin American counterparts, especially Argentina, have it a bitharder:most share a tight fiscal situtation, and […]