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 for the coupon for adjusted to GDP growth. It would help if Argentina worked more closely with the IMF on this issue. 

There are still mixed signals about economic activity, indicating that the economy is slowing down but still growing at an annual rate of around 3 or 4 percent. Industrial output and construction activity recovered from the losses in April, while the rate of unemployment remained almost unchanged and the latest index of economic activity fell for the first time in nineteen months. Growth for 2004 could still exceed 8 percent, but the economy is growing at a lower pace.