Argentina GDP Review: 1.7% Contraction in Q2

September 19, 2024 1:38 PM UTC

Argentina’s GDP contracted by 1.7% in Q2 2024, marking three consecutive quarters of decline, largely due to Milei’s economic reforms. While agriculture grew by 80%, industry and consumption sharply declined. A 4.9% contraction is expected for 2024, with limited recovery in 2025, far below gover

Argentina CPI Review: 4.2% only in August

September 12, 2024 2:18 PM UTC

Argentina’s CPI rose 4.2% in August, surpassing market expectations, with Y/Y inflation falling to 236% from 260%. Public service tariff adjustments, particularly in Transport and Housing, were key inflation drivers. Food prices increased 3.5%, while goods CPI grew 3.2%, suggesting a slowing infla

Argentina: Economy Continues to Shrink

August 22, 2024 2:08 PM UTC

Argentina’s economy contracted by 0.3% in June (m/m), according to INDEC’s monthly activity indicator and, in quarterly terms, it will accumulate three consecutive quarter of contraction. Despite an 80% annual rise in agricultural activity due to base effects, other sectors like construction and

Argentina: CPI at 4.0% in July

August 15, 2024 2:52 PM UTC

Argentina's July CPI rose 4.0%, the lowest since January 2022, yet still above the 2% crawling peg, suggesting real exchange rate appreciation. Year-over-year CPI fell to 263% from 271% in June, with further declines anticipated. Despite some inflation reduction under Milei, price distortions and re

Argentina CPI Preview: Inflation Continues to Slowdown

August 13, 2024 12:57 PM UTC

On July 14 Argentina National Statistics Institute (INDEC) will release CPI data for July. Argentina's fiscal adjustment and zero ARS emissions strategy have eased inflation, reducing CPI growth from 20% in January to 3.5% in July. However, the crawling peg exchange rate policy and lack of internati

Argentina: Making Sense of the Three Stages Plan

July 26, 2024 2:51 PM UTC

The Central Bank of Argentina's plan for macroeconomic stabilization includes three stages: an orthodox fiscal exit, establishing an orthodox monetary framework, and prudently lifting FX controls. The fiscal deficit reduction has helped end the monetization of the deficit, while transitioning to a c

Argentina: Agriculture Drives Growth in May

July 19, 2024 1:10 PM UTC

The Argentine economy showed a 1.3% growth in May, driven mainly by the recovering agricultural sector, which is 100% higher than last year. However, other sectors like manufacturing and construction continue to lag. Despite the growth, economic recovery is uncertain due to fiscal adjustments, excha

Argentina: June CPI and Cleaning the Central Bank Balance

July 15, 2024 1:24 PM UTC

Argentina's CPI rose by 4.6% in June, up from 4.1% in May, missing market expectations of 5.1%. The Y/Y CPI fell to 271%. Housing items saw the highest increase at 14.2%, while core CPI growth slowed to 3.0%. Inflation may stabilize around 4.0% monthly. The Central Bank of Argentina's policies are m

Argentina GDP: Economy Shrinks 2.6% in the First Quarter

June 25, 2024 2:16 PM UTC

Argentina's GDP shrank by 2.6% in Q1, entering a technical recession. Investments and consumption dropped significantly, while agriculture grew. This contraction, driven by Milei's economic policies, is expected to continue in Q2, with rising unemployment and poverty. A slightly recovery is anticipa

LatAm Outlook: Pausing the Cuts

June 24, 2024 6:00 PM UTC

·       Brazil and Mexico growth will decelerate from the growth rates in 2023. The stronger basis of comparisons in 2023 and the tight monetary policy will diminish growth during 2024. Brazil robust Agricultural growth will not repeat in 2023 while Mexico is on the limit of growing due to a

Argentina: Fourth Consecutive Month of Primary Surplus but It is Reducing

May 22, 2024 2:44 PM UTC

Argentina has delivered the fourth consecutive months of primary surplus. Most of this surplus comes from cutting the consumption of goods and services by the national administration and mainly by the pace of revenues growth which surpassed the growth of expenditures. However, the surpluses are redu

Argentina CPI Review: Monthly Inflation Drops to One Digit

May 15, 2024 12:18 PM UTC

Argentina's April CPI dropped to 8.8% after six months above 10%, with Y/Y CPI at 289%. Key rises included housing (+36%) and communication (+14.2%). Javier Milei's program and fiscal adjustments have reduced monetary emissions to zero, easing inflation. The Central Bank cut the policy rate to 40%.

Argentina: Activity is Shrinking but that is the Price to Stabilize

April 26, 2024 5:52 PM UTC

The INDEC data for February reveals a 0.2% economic shrinkage, signalling a 5.1% drop since August 2023, potentially leading to a Q1 2024 recession. High inflation and fiscal adjustments are primary causes. Some foresee 0% April inflation due to price realignment and stable ARS. Despite low reserves

Argentina CPI Review: Small Improvements Amid the Uncertainty

April 14, 2024 1:26 PM UTC

The INDEC's March CPI data reveals an 11.0% increase, down from February's 13.2%. Annually, Argentine CPI rose by 287% (Y/Y), with core CPI below 10%. Despite past shocks, we foresee continued monthly CPI slowdown. Argentina focuses on fiscal measures and on stabilize the exchange rate to accumulate

LatAm Outlook: Getting Deeper in the Cutting Cycle

March 22, 2024 7:04 PM UTC

·       Brazil and Mexico growth will decelerate from the growth rates seen in 2023. The stronger basis of comparisons in 2023 and the tight monetary policy will diminish growth during 2024. Brazil robust agricultural growth will not repeat in 2024, while Mexico growth is restrained by a tigh

Argentina CPI Review: Inflation Eases in February to 13%, but it Still a Long Road

March 13, 2024 8:09 PM UTC

The February CPI release by Argentina's INDEC shows a slight ease in inflation to 13.8% (m/m), yet on an annual basis, it has soared to 276%, hitting a record high since the 1980s. Major increases were noted in Transport (21%), Food and Beverages (11%), and Housing (20%). While indicating initial im

Argentina: CPI grows 20.6% in January

February 15, 2024 1:26 PM UTC

Argentina's CPI surged in January, marking a 20.6% increase (m/m), the highest globally. Annual figures show a staggering 254% rise. The rise was influenced by the exchange rate devaluation and the release of controlled prices. Only in April we will probably see a CPI cleaned from this noises. The g

Argentina: Milei’s First set of Laws Rejected in the Chamber of Deputies

February 7, 2024 12:53 PM UTC

JJavier Milei's ambitious deregulation laws for the Argentine economy faced rejection in the Chamber of Deputies, signaling challenges in negotiating with the current Congress. Milei's government must now revise its strategy, possibly focusing on less contentious issues. Despite setbacks, the govern

Argentina: Road to stabilization will be bumpy

January 24, 2024 9:38 PM UTC

Javier Milei's administration, despite securing an IMF deal, faces hurdles in stabilizing Argentina. Targeting a $10 billion increase in net reserves, equivalent to a quarter of the country's gross reserves, may prove overly ambitious. Contentious laws in Congress lack consensus, sparking opposition

Argentina: Milei’s Emergency Decree Will Test Congress Support for His Agenda

December 21, 2023 1:58 PM UTC

After a day of subdued protests organized by social organizations, Javier Milei took to television to announce a series of measures aimed at deregulating the Argentine economy. Milei's objective is clearly to transition from a state-led economy to a pro-market economy as quickly as possible. His dec

LatAm Outlook: Diverging Paths in 2024

December 15, 2023 12:25 PM UTC

Our Forecasts
Risks to Our Views
Source: Continuum Economics
Brazil: Switching Back to Slow Growth?
Brazil growth has finally begun to decelerate (here), as the growth in the third quarter dropped to 0.1% (q/q). However, growth for 2023 is expected to stand at 3.2% (Yr/Yr) which is quite a bit higher th

Argentina: Tentative Shock Plan Announced

December 14, 2023 3:50 PM UTC

Figure 1: Argentina Exchange Rate (ARS/USD)Source: Refinitiv and MEF
Argentina's new Economic Minister, Luis Caputo, has unveiled the initial economic measures under Javier Milei's administration, focusing on addressing the root cause of Argentina's economic woes—the fiscal deficit. In a 16-minute

LatAm: Long Term Growth Differences

November 24, 2023 11:52 AM UTC

We see different patterns of growth for the Latin American countries. Brazil, Mexico and Argentina have different types of constraints that will define their long-term growth.
Figure 1: Annual GDP Growth
Source: Continuum Economics. *forecasts
We observe that the long-term growth trajectory for Brazil

El niño impacts on Latin America: a headwind for Brazil

November 22, 2023 11:30 AM UTC

El Niño is a climate pattern that makes Pacific Ocean waters warmer and, consequently, triggers extreme weather conditions in Latin America (LatAm) economies. However, its impacts among the LatAm countries varies. In some regions, this climate phenomenon causes severe droughts, impacting agricultur

Argentina CPI Review: Prices Freeze led to a slowdown on inflation

November 14, 2023 5:17 PM UTC

Figure 1: Argentina CPI by Groups (m/m, %)
Source: INDEC
The Argentina National Statistics Institute (INDEC) has recently released the Consumer Price Index (CPI) data for October. According to the data, Argentina's CPI witnessed an 8.3% month-on-month increase. Despite the elevated inflation levels fo

LatAm Outlook: Growth Continues

September 28, 2023 8:46 PM UTC

Our Forecasts
Risks to Our Views
Source: Continuum Economics
Brazil: Brighter than Expected
The Brazilian economy has surpassed expectations in the first half of this year. In the initial quarter, robust growth was predominantly driven by an exceptional surge in the agricultural sector, as soybean produ

Argentina: Post Primaries Devaluation

August 22, 2023 1:32 PM UTC

Figure 1: Official and Black Market Exchange Rate (ARS/USD)
Source: BCAR and Refinitiv
Following the unexpected triumph of far-right candidate Javier Milei in the Argentine Primaries, a comprehensive set of measures has been unveiled by the Argentine Government. Notably, a 21% devaluation of the offi

Argentina Primaries: An Open Three Horses Race

August 14, 2023 8:12 PM UTC

Figure 1: Votes in the National Primaries for Presidency (%)
Source: La Nacion
Argentina's National Primaries Election took place on August 13th, serving as a crucial preliminary step in determining the final candidates for the upcoming general election scheduled for October 22nd. Currently, three mai

Argentina: New Staff Level Agreement with IMF Reached

July 31, 2023 2:27 PM UTC

Figure 1: Argentina Gross International Reserves (USD Bn)
Source: BCRA
Argentina has reached a new agreement with the IMF concerning their existing deal. The recent severe droughts have made it evident that the quantitative targets of the previous agreement would not be achieved, necessitating negotia

Argentina: Elections Shapes up

July 18, 2023 4:53 PM UTC

Argentina's upcoming election is taking shape, with Presidential candidates for the primaries now well-defined. The ruling coalition, now operating under the new name "Unión por la Patria," has nominated two candidates: Economy Minister Sergio Massa and youth leader Juan Grabois. On the other side,

LatAm Outlook: Lower Inflation and Growth above Expectations

June 21, 2023 9:27 AM UTC

Our Forecasts
Risks to Our Views
Source: Continuum Economics
Brazil: Higher Agricultural Production and Lower Inflation
The Brazilian economy experienced robust growth in the first quarter of 2023, with a notable expansion of 1.9% quarter-on-quarter (here). This growth was primarily driven by a remarkab

Argentina: Small Recover Delays the Recession Threat for Now

May 26, 2023 2:14 PM UTC

Figure 1: Argentina Activity Index (2019 = 100, Seasonally Adjusted)
Source: INDEC
The Argentine National Statistics Institute (INDEC) has released the estimation of its monthly activity indicator. The released data suggest that the Argentine economy has recovered during the first months of the year.

Argentina: Inflation Uproar

May 16, 2023 2:35 PM UTC

Figure 1: Argentina Inflation (%)
Source: INDEC
Argentine inflation came as a surprise in April, surpassing expectations. The Bloomberg market survey projected a 7.5% (m/m) increase, but the figures released by the National Statistics Institute (INDEC) revealed a higher growth of 8.5% (m/m). Consequen

Argentina: Economic Chaos Continues

May 5, 2023 1:05 PM UTC

Figure 1: Argentina Gross International Reserves
Source: BCRA
Argentina reserves have dropped to the lowest levels in 7 years. Initial estimates points that Argentina is likely to loss USD 3.5 Bn in grain exports due to the severe drought in 2023, which will affect the capacity of the Central Bank of

April 27, 2023 1:06 PM UTC

Mexico:
Figure 1: Mexico Exports and Imports (12 months sum, USD Bn)
Source: INEGI
Mexico’s main trading partner is the United States, which corresponds to 80% of their exports values. Additionally, Mexico is a relatively open economy as trade corresponds to around 40% of Mexican GDP. The main story

Argentine Elections: Incumbent President Fernandes Withdraws from the Race

April 25, 2023 12:34 PM UTC

On a suddenly move, incumbent President Alberto Fernandes has withdrawn from the electoral race. In a 7 minutes’ video posted on his social networks, the President stated that he will work toward a smooth succession to whoever wins on the ballots in October. There have been many clashes within its

Argentina: CPI Continues its Upward Trend

April 17, 2023 4:56 PM UTC

I
Figure 1: Argentina CPI (%, y/y)
Source: INDEC
Argentine statistics institute (INDEC) has released inflation data for March. Unsurprisingly, inflation has continued its upward trend reaching 104.2% (y/y) by growing 7.9% (m/m) during March. Food inflation, which affects mainly the poorest have registe

Argentina: IMF Deal Relaxed; The New Agrodollar

April 6, 2023 7:05 PM UTC

IMF Deal Relaxed
The IMF has concluded the fourth review of their deal with Argentina. On the document, they stated that all the targets set for the program for the Q4/2022 were fulfilled, namely, the primary target of 1.9% of the GDP, the ceiling for the monetary financing of the Treasury at 0.8% of

LatAm Outlook: Putting the Gears Down

March 24, 2023 3:09 PM UTC

Our Forecasts
Risks to Our Views
Source: Continuum Economics
Brazil: Handbrakes on
The Brazilian economy has begun to show signs of deceleration as the effects of the contractionary policy are starting to be felt. Q4 GDP (here) has marginally contracted (-0.2% q/q), and the strong impetus that the servi

March 23, 2023 6:59 PM UTC

Figure 1: Argentina’s GDP (2019 = 100, Seasonally Adjusted)
Source: INDEC and Continuum Economics
Argentine National Statistics Institute (INDEC) revealed the GDP figures for the last quarter of 2022. In line with other activity indexes (here), the GDP figures shows a strong contraction during the l

Argentina: IMF Quarterly Review Concluded, Inflation Surpasses the Triple Digits.

March 16, 2023 2:15 PM UTC

IMF has concluded the fourth quarterly review of the USD 50Bln deal with Argentina and concluded that all Q4-2022 targets were achieved, which would allow a further disbursement of around USD 4Bln to occur. Indeed, Argentina was able to comply with the 2.5% fiscal deficit, and the accumulation of ne

Argentina: Activity Index Shows a Strong Contraction in Q4

February 27, 2023 1:36 PM UTC

Figure 1: Argentina Monthly Economic Activity Index (2004=100, Seasonally Adjusted)
Source: INDEC
Argentine National Statistics Institute has released its monthly economic activity index for December. The index has contracted for four consecutive months and accumulated a 1.7% fall during the last quar

Argentina: Inflation Reaching Triple Digits

February 17, 2023 1:53 PM UTC

Figure 1: CPI Inflation (y/y)
Source: Indec
January CPI came hot in Argentina. The index grew 6% despite the government efforts to manage price increases through the Fair Prices Measure (here). The y/y index reached 98%, the biggest since Argentina hyperinflation of the early 1990’s. The inflation i

Argentina Politics: Incumbent President Fernandes Set not to Be Re-elected

January 18, 2023 1:43 PM UTC

Complex Economic Situation
Inflation in Argentina has risen to the highest since its hyperinflation years in 1991. The y/y figure reached 95%. Although it avoided triple digits as many market participants were previewing, Argentina registers one of the biggest inflation in the world and getting out o