Argentina: Milei’s Plan Going Smoothly

October 22, 2024 5:51 PM UTC

Since taking office, Milei's administration has focused on tackling Argentina's fiscal and monetary imbalances, implementing a shock fiscal plan to reduce expenditures by 4% in 2024. Fiscal surpluses have been recorded monthly, but the adjustment has caused three consecutive quarters of economic con

LatAm Outlook: Diverging Patterns

September 24, 2024 12:54 PM UTC

·       Brazil and Mexico started to diverge in terms of growth. While we see Brazil GDP growing above 3.0% in 2024 (pushed by the internal demand), we see Mexico’s growth decelerating to 1.3%, due to weaker demand from U.S. and contractionary monetary policy. In 2025, we see Brazil growing

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: December CPI Data and IMF

January 24, 2024 2:47 PM UTC

Argentina's CPI surged in December due to a sharp exchange rate devaluation. The new government's bold fiscal measures aim to curb inflation, but potential contractionary effects and public reactions pose challenges. A $4 billion IMF disbursement supports their plan, diverging from past gradualism.

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

December 21, 2023 1:58 PM UTC

Javier Milei's rapid push for Argentine economic deregulation faces its initial test in Congress. Proposing over 30 amendments, including repealing significant laws, Milei aims for a swift transition to a pro-market economy. With the Emergency decree requiring support from the fragmented Juntos por

LatAm Outlook: Diverging Paths in 2024

December 15, 2023 12:25 PM UTC

·     We foresee Brazilian GDP growth decelerating in 2024, while we see Mexico continuing strong growth as a consequence of higher demand from U.S. and nearshoring. Argentina will see some growth in 2024 due to a lower basis of comparison and a better harvest in the agricultural sector.
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Argentina: Tentative Shock Plan Announced

December 14, 2023 3:50 PM UTC

Argentina's Economic Minister, Luis Caputo, reveals pivotal economic reforms to tackle the nation's fiscal deficit. Key measures include currency devaluation, subsidy cuts, and ministry reduction. While aiming for a zero deficit, skepticism lingers, especially with unaddressed pension issues. The pl

LatAm: Long Term Growth Differences

November 24, 2023 11:52 AM UTC

In Latin America, distinctive long-term growth patterns are emerging. Brazil faces challenges of an aging population and constrained capital growth, aiming to return to pre-pandemic growth at 1.7%. Mexico anticipates growth through nearshoring, intensifying existing industries for a 2% long-term pro

El niño impacts on Latin America: a headwind for Brazil

November 22, 2023 11:30 AM UTC

El Niño, a climate pattern intensifying Pacific Ocean warmth, triggers varied impacts across Latin American economies. Severe droughts affect agriculture in some regions, while excessive rains benefit others but pose risks of flooding. Initiated in 2023, El Niño persists until 2024. In 2016-17, Br

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

November 14, 2023 5:17 PM UTC

Argentina's CPI rose 8.3% in October, a slowdown from the prior 12.1%. Yet, the Yr/Yr CPI surged to 142.7%, the highest since 1991, with Core CPI at 150%. Communication, Household Goods, and Clothing led expenditure increases, surpassing 10% on the month, while Health (6.1%) and Education Services (

LatAm Outlook: Growth Continues

September 28, 2023 8:46 PM UTC

Argentina: Post Primaries Devaluation

August 22, 2023 1:32 PM UTC

In the wake of Javier Milei's unexpected far-right victory in the Argentine Primaries, the government has introduced a sweeping package of measures, including a 21% devaluation aligned with IMF terms for a USD 7.5 billion disbursement. While aimed at countering inflation and boosting exports, doubts

Argentina Primaries: An Open Three Horses Race

August 14, 2023 8:12 PM UTC

Argentina recently held its national primary elections for the presidential race, yielding surprising results. Notably, the far-right candidate, Javier Milei, secured a significant victory by capturing 30% of the total votes. The center-right opposition coalition attained 28% of the votes, designati

Argentina: New Staff Level Agreement with IMF Reached

July 31, 2023 2:27 PM UTC

Due to the severe droughts faced in rural areas, the IMF has revised its current deal with Argentina, lowering the reserve accumulation targets for end 2023 and allowing Argentina to access USD 7.5 billion in the upcoming months. Due to the low level of FX reserves we believe severe import restricti

Argentina: Elections Shapes up

July 18, 2023 4:53 PM UTC

Argentina’s upcoming primary election will feature two candidates from the ruling coalition “Unión por la Patria” and two candidates from the opposition coalition “Juntos por el Cambio”, while Javier Milei will be the sole candidate for “La Libertad Avanza”. We expect the ruling coali

LatAm Outlook: Lower Inflation and Growth above Expectations

June 21, 2023 9:27 AM UTC

Argentina: Small Recover Delays the Recession Threat for Now

May 26, 2023 2:14 PM UTC

Recent activity data for Argentina suggests that the economy has exhibited a partial recovery following the 1.5% decline experienced in the previous quarter of 2022, indicating positive growth during Q1. However, it is important to acknowledge the potential challenges that lie ahead for Argentina's

Argentina: Inflation Uproar

May 16, 2023 2:35 PM UTC

Argentine inflation in April exceeded expectations, with the Consumer Price Index (CPI) rising to 108% and core inflation surging to 105% (y/y). Finance Minister Sergio Massa, held a lengthy meeting to discuss measures to address the inflation problem and we believe the proposed solution will have a

Argentina: Economic Chaos Continues

May 5, 2023 1:05 PM UTC

Argentine reserves have dropped to a 6 years low and is set to continue to face difficulties in the coming months due to the impact of the droughts. We believe the government will have no answer, but to increase the import restriction which is likely to put Argentina in a recession in 2023. As econo

April 27, 2023 1:06 PM UTC

The biggest LatAm economies have been showing different path in terms of their trade balance, especially their exports. We take a look at the main trends for the three biggest LatAm countries: Mexico, Argentina and Brazil.

Argentine Elections: Incumbent President Fernandes Withdraws from the Race

April 25, 2023 12:34 PM UTC

In a suddenly move, incumbent President Alberto Fernandes has withdrawn from the electoral race. However, neither the candidates of the ruling coalition “Frente de Todos” and opposition “Juntos por el Cambio” are decided. We take a look at some names, which could appear on the primary electi

Argentina: CPI Continues its Upward Trend

April 17, 2023 4:56 PM UTC

Argentina CPI’s has increased 7.9% (m/m) during March, reaching 104.2% (y/y). Food Inflation has reached 109% (y/y). The high number of inflation is affecting the feasibility of the Fair Prices measures, which restricted the rise of several products up to 4% per month. We believe inflation will ke

Argentina: IMF Deal Relaxed; The New Agrodollar

April 6, 2023 7:05 PM UTC

The IMF has agreed to relax the FX accumulation target of the Argentina deal by reducing it in USD 1.6 Bn, reflecting the effect of lower production of grains in 2023. We believe the IMF will continue to be flexible which means that even if other targets of the deal are not met the disbursements wil

LatAm Outlook: Putting the Gears Down

March 24, 2023 3:09 PM UTC

March 23, 2023 6:59 PM UTC

Argentine economy has contracted 1.5% during the last quarter of 2022 revealing a weak demand in the absence of the Covid-19 rebound. Therefore, Argentina grew 5.2% in 2022, a high number influenced by the poor 2021 growth. We believe inflation will continue to be high in Argentina during 2023 affec

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

March 16, 2023 2:15 PM UTC

IMF has concluded its fourth quarterly review of the USD 50Bln stating that the quantitative targets related to net FX accumulation, fiscal deficit and monetary financing of the deficit were all achieved during the last quarter of 2022, which will allow a USD 5Bln disbursement to go on. Inflation ha

Argentina: Activity Index Shows a Strong Contraction in Q4

February 27, 2023 1:36 PM UTC

Argentine monthly activity index contracted strongly (-1.7%) during the last quarter of 2023, revealing that the re-opening effect over economy activity have fully dissipated and now the macroeconomic unbalances will start to be reflected on lower growth numbers. We forecast Argentine economy to con

Argentina: Inflation Reaching Triple Digits

February 17, 2023 1:53 PM UTC

January Inflation came hot for Argentina with the CPI index rising 6% (m/m), the y/y index reached 98.8% the highest index since Argentina hyperinflation in the beginning of 1990’s. We forecast Argentina inflation to continue to run close of 100% level in 2023, as we see the government with diffic

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

January 18, 2023 1:43 PM UTC

Argentina will face a general election in October 2023 to decide Alberto Fernandes successor. Elections occur in a complex economic environment. We take a look at possible candidates for the elections and we believe the opposition coalition “Juntos por el Cambio” is the likely to come out victor