Argentine Farmland: the Promised Land
Finally, the government is getting better news in the economic front as all pieces are starting to fall into place; September appears to have been the turning point. Inflation has clearly receded from the high rates that prevailed since December of last year and is now more likely to remain in the 1.5% per month […]
Argentine Banks: Stretching the muscles to grow
Banking penetration in Argentina is low. As of today, deposits account for nearly 20% of GDP and the depth of banking intermediation has been erratic over time in response to macroeconomic cycles. The most important increase in banking penetration took place in the 90’s when the ratio of deposits to GDP rallied from 15% to […]
Waiting for the IMF and the Article IV
What will the IMF find when it arrives next month to conduct the first article IV review in a decade? Argentina is an economy that is still suffering from the large external and fiscal imbalances inherited from the Kirchner administration, from the large distortions in relative prices that are extremely costly to correct, while it […]
The ups and downs of the Macri-economics scenarios
All eyes are now posed on the evolution of key macroeconomic variables, as inflation is displaying more persistence than had been anticipated, the recession is proving to be deeper, while there are more concerns about the fiscal accounts and the real appreciation of the peso. In what follows we rely on a matrix of scenarios […]
The capital market in Argentina: warming up the engine
The local capital market is relatively small and unsophisticated. This is a legacy of a long history of monetary instability, macroeconomic crises and massive breach of contracts, which undermined the confidence in the local currency and economic institutions. As a direct consequence, most Argentines save abroad the country (which eases financing terms and credit availability […]
Investment: the key to unlock growth
Argentina is entering into a new economic cycle where investment is expected to be the main engine of growth. This represents a change in relation to the way the economy worked in the last years, as consumption had been the tractor, boosted by expansionary fiscal and monetary policies, negative real interest rates and zero-interest installments […]
Bye-bye default, hello financing
The first four months have been very positive for the Macri administration regarding the achievements on both the political and the economic fronts.
The exchange rate in search of an equilibrium
After two months of smooth sailing the economy enters a more turbulent period in which inflation suffers the effects of the depreciation and the increases in utility rates, the economy is in the depth of the recession and reserves and the exchange rate are still under pressure awaiting the benefits of capital inflows and the […]
A good start, but many challenges ahead
In January the Macri administration continued to consolidate politically. Its positive image improved as it dispelled the worst concerns about the possibility of a runaway inflation or a situation of social unrest that Scioli raised in the presidential campaign.
The scorecard of Macris first month
Macris first month in office has been on the whole very positive for the economy. He scored a huge victory on the unification of the foreign exchange market and the elimination of the cepo, as it was achieved without the complications on the inflation front that many were forecasting. It was essentially a non-event, which […]