Argentinas new macroeconomic outlook: too many clouds in the horizon
In the last few weeks the political and economic climate has been heating up on the way to the October mid-term elections, and the government is facing the most difficult political juncture since 2009. The political situation has been dominated by three events. First, there was a large flood in the city of La Plata […]
The economy at a crossroads: is there a way out?
The Argentine economy is showing signs of fatigue and deterioration and there is little hope at the moment that the outlook could improve in the near future. Between 2003 and 2011 Argentina enjoyed an overall good performance characterized by high growth, external balance and a reasonable fiscal situation with relatively small side effects on inflation, […]
The exchange rate blues
The year has started with financial issues taking center stage, as concerns about the evolution of the exchange rate, inflation and credit spreads have taken center stage in the economic debate. The rapid and large depreciation of the parallel exchange rate has been the dominating financial issue (see section 2). The spread between the official […]
The exchange rate blues
The year has started with financial issues taking center stage, as concerns about the evolution of the exchange rate, inflation and credit spreads have taken center stage in the economic debate. The rapid and large depreciation of the parallel exchange rate has been the dominating financial issue (see section 2). The spread between the official […]
Debt: A story of Vultures, Penguins and Lawyers
The last few weeks Argentina has being undergoing a legal saga typical of one of the best John Grisham thrillers. It had all the ingredients including a grumpy judge, greedy investors, a stubborn government, lots of money at stake and a last minute legal decision that put a country on the brink of a new […]
Chaco and New York: An explosive cocktail
Argentina has done it once more, and the financial markets are desperately looking for answers. Uncertainty is the name of the game. First, the province of Chaco made a payment in pesos of a dollar denominated bond, while just three weeks later a New York Court of Appeals released a decision that represented a setback […]
A better economic outlook in a more complex political environment
There are clear signs that economic activity has reached a floor, that July marked a turning point and that the economy is undergoing an anemic recovery. Most likely growth will remain well below the 3.26% rate which is the trigger for the payment of the GDP warrant next year, but nevertheless we have revised our […]
Growth in the era of low investment
The recent economic indicators tend to confirm that the economy is entering in a period of stagflation. We have revised downward our estimates for this year and we now expect it to grow by around 0.5%, in spite of a statistical “carry over” effect of 1.4 percentage points from last year. On the other hand, […]
Mid-term macro assessment: Goodbye growth, hello stagflation
During the first semester there has been a sharp deterioration in the overall macroeconomic performance. While external factors have played a role, most of the explanation lies on domestic economic conditions and policies. The most recent figures show a drop in industrial production, investment, construction, retail sales and consumer confidence among other indicators. In the […]
Soft landing, hard landing or what?
The economy could have entered into recession territory in the second quarter while inflation and wage increases have remained unabated at around 25%, the spread in the parallel exchange rate market reached 30% and there are no indications that it is going to drop any time soon, import controls are preserving reserves but at the […]