Waiting for the IMF
The strategy of a gradual reduction of the fiscal deficit that the government implemented since the outset had always had one weakness: it depended on external financing. Confidence was of the essence. Unfortunately, the increase in US interest rates, the strengthening of the US dollar combined with some domestic factors, such as the high rate […]
The Central Bank in the spotlight
In a sudden change in policy in March, the Central Bank moved away from the floating exchange rate and decided to intervene to stabilize it at around AR$ 20.20, following three months in which the depreciation of the currency accumulated almost 20%. We believe that this change in policy will be sustained for the next […]
Where do we stand on monetary policy?
The last few months have been difficult for the Macri administration on the economic and political fronts. Its popularity dropped to the pre-October election levels of around 46% after surging in late October and November, consumer confidence suffered, and the overall mood among investors and the business community clearly took a bearish turn.
What to expect after the December shockwaves
The year began as the previous one had finished, with a shaken exchange market and growing uncertainty as to whether inflation will be able to moderate at the desired pace. The exchange rate continued to depreciate in January (4.7%) and so far this month has surpassed 20.00 ARS/USD, without the intervention of the Central Bank. […]
The pros and cons of changing the inflation targets
December was a hectic month for Macris administration, with relevant news in the economic, social and political fronts. On the one hand, the Government succeeded in passing the 2018 Budget, the tax reform and the Pension Reform in the Lower House. Although it was finally approved, the Pension Reform has drawn criticism from opposition politicians […]
What can we expect for the next two years
In November the Government took advantage of the great results in general elections of October and presented a package of reforms. Some of them have been already approved by the Senate and will be discussed in the Lower House. The tax reform stands out: it includes a new financial revenues tax for individuals, changes to […]
The unpleasant effects of tight money
October was a month with plenty of news, in both the political and the economic side. Regarding elections, the ruling party not only prevailed in the province of Buenos Aires, but it also won in 13 other provinces and scored the five most populated districts (Province and City of Buenos Aires, Córdoba, Santa Fe, and […]
A quick look at Macri´s first two years and what comes next
September brought good news regarding economic recovery: the INDEC published the GDP figures for Q2 of 2017, which reflected the steady progress of economic activity again (0.7% q/q s.a. and 2.7% y/y). Unlike the demands behavior over the last few years of growth, this time investment led the recovery. However, warning lights turned on in […]
Is Argentina facing a turn in the political cycle?
The first half of August was marked by the primary elections, which resulted in a victory of the official party Cambiemos at the national level. In the Province of Buenos Aires, the final scrutiny threw Cristina Kirchner as the winner by a very small margin. However, recent polls indicate that Esteban Bullrich, the official candidate, […]
Medium term economic scenarios after the elections
The results of last Sundays primaries were music to the ears for Cambiemos, as Macri´s coalition won comfortably in three of the main districts (the city of Buenos Aires, Cordoba and Mendoza) and probably lost by a very small margin in the other two (in the provinces of Buenos Aires and Santa Fe). In addition, […]