Argentina Economic Outlook
January 21, 2020Economic growth slumped in the third quarter after flatlining in annual terms in the second quarter. Another large contraction in domestic demand and softer support from the external sector were behind the downturn. Available data suggests the economy remained mired in recession in the fourth quarter: Economic activity shrank in October, industrial production fell in the first two months of the quarter, and consumer confidence remained depressed. Meanwhile, on 21 December, Congress approved an emergency bill delivered by the new Peronist government. In an attempt raise fiscal resources while protecting the most vulnerable social groups, the bill hikes several taxes, freezes utility tariffs and gives the government the power to revise pension benefits, while also providing cash for lower pensions. However, its ability to rein in public accounts and put the economy back on track seems doubtful.
Argentina Economic GrowthIn 2020, the economy looks set to shrink for a third consecutive year. Although the pace of contraction should ease, still-high inflation and interest rates, coupled with faltering investor confidence, will weigh on investment and spending, while the new levies will hamper export growth. Renegotiations of the country’s public debt and interventionist policies pose downside risks. LatinFocus Consensus sees the economy contracting 1.5% in 2020, which is up 0.3 percentage points from last month’s estimate, before rebounding 1.7% in 2021.
Argentina Economy Data
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|Bond Yield||6.69||0.15 %||Dec 17|
|Exchange Rate||59.88||0.45 %||Dec 30|
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Argentina Economic News
January 24, 2020
The Universidad Torcuato di Tella (UTDT) consumer confidence index edged up to 43.0 in January from 42.4 in December.
January 23, 2020
The monthly indicator for economic activity (EMAE, Estimador Mensual de Actividad Económica) fell 1.9% year-on-year in November, after logging a 0.7% contraction in October.
January 23, 2020
Exports ticked up a marginal 0.7% in year-on-year terms in December, following November’s much stronger 10.1% increase.
January 16, 2020
On 21 December, Congress approved an emergency economic reform package delivered by the new Peronist government led by Alberto Fernández.
Argentina: Central Bank lowers interest rate floor at January meeting, raising the spectre of a rapid monetary expansion
January 15, 2020
On 9 January, in a bid to stimulate the economy, the Central Bank of Argentina (BCRA) decided to reduce the lower floor for the LELIQ rate to 52.0% from 55.0%, a move which could prompt a further rapid expansion of liquidity.