A shift in Exchange Rate Policy?

The most recent economic indicators continue to show that the economy maintains its strength and that growth this year will be at least 7.5%.

Industrial production increased by 0.9% in June and accumulates a rate of growth of 8.9% in the last twelve months; construction grew 2% in June and almost 24% in the last year while the few available indicators on consumer spending indicate that consumption remains very strong and that consumer confidence continues to be at very high levels despite displaying a small drop in the most recent reading.

These rates of growth are perhaps too high for comfort, as a larger number of sectors are reaching their production capacity limits putting additional pressures on inflation. Besides, the supply of energy is becoming a bigger concern for future years, as demand for electricity increased by 7% in the last twelve months. This means that in one year Argentina will lose its excess capacity and that there are likely to be energy shortages unless the weather (in terms of temperatures and rain) is even more benign than in previous years.