Argentina Economic Outlook
March 17, 2020The economy most likely contracted again in Q4, as suggested by shriveling economic activity in October-December, following a year-on-year drop in the third quarter. Turning to Q1, a dip in both industrial production and exports in January, coupled with abysmal consumer sentiment in the first two months of the year, hints that the economy remains in the doldrums. Meanwhile, on 10 March, President Alberto Fernández signed a decree authorizing the government to restructure USD 68.8 billion of foreign debt, paving the way for tense negotiations with creditors. This follows a statement released by the IMF on 19 February, which deemed the country’s debt unsustainable and called for a “meaningful contribution from private creditors”. On the fiscal front, in early March, the government raised taxes on soybeans from 30% to 33% to increase revenues ahead of a likely debt restructuring, further straining relations with the agricultural sector.
Argentina Economic GrowthIn 2020, the economy looks set to remain stuck in recession, although the pace of contraction should soften. An unfavorable investment environment, high inflation and policy uncertainty will depress domestic demand, while the new levies will weigh on export growth. Interventionist policies, spillovers from Covid-19 and tough debt renegotiations ahead further cloud the outlook. LatinFocus Consensus sees the economy contracting 1.6% in 2020, which is down 0.1 percentage points from last month’s estimate, before rebounding 1.5% in 2021.
Argentina Economy Data
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|Bond Yield||6.69||0.15 %||Dec 17|
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Argentina Economic News
March 31, 2020
The monthly indicator for economic activity (EMAE, Estimador Mensual de Actividad Económica) fell 1.8% year-on-year in January, after logging a 0.2% dip in December.
March 27, 2020
Exports fell 2.8% in year-on-year terms in February, following January’s softer 0.8% dip.
March 26, 2020
Economic activity in the fourth quarter fell 1.1% year-on-year, following Q3’s sharper 1.8% slump, according to the Statistical Institute (INDEC).
March 16, 2020
The Universidad Torcuato di Tella (UTDT) consumer confidence index edged down to 42.7 in February from 43.0 in January.
March 13, 2020
Consumer prices rose 2.0% over the previous month in February, coming in below January’s 2.3% rise and marking the softest increase since January 2018, according to the National Statistical Institute (INDEC).