Argentina’s debt management is going to be firmly in the spotlight next Wednesday, when it squares off against so-called “vulture funds” in a New York appeals court in the pari passu case that, in the worst-case scenario, could spell a fresh default.
That’s a story for another day. But while we’re on the subject of Argentina’s debt policy, Luis Secco, an independent economist, has had a closer squint at the government’s record on debt reduction – a key tenet of government policy. Continue reading »
Argentina has an impressive ability, it seems, to bite the hand that feeds it: farming.
It’s an impression reinforced by Rabobank’s latest Argentine agribusiness outlook. Argentina’s farming sector, which makes up nearly 60 per cent of total exports ($47bn in 2012, and that was a bad year because of drought), is a key economic breadwinner, bringing home the dollars that are essential to an economically choppy country still with debt in default and cut off from international capital markets. Continue reading »
So, it finally did it. After a series of warnings, the International Monetary Fund has issued a declaration of censure against Argentina over its faulty inflation and GDP data.
It’s an unprecedented step. It could be followed by the ultimate sanction of expulsion from the IMF under a lengthy procedure now set in motion. But few people (yet) expect it to come to that. Continue reading »
Lately the economic news out of Argentina has been gloomy: flat growth plus high inflation, against a backdrop of foreign exchange and trade restrictions and a tough international environment.
And yet foreign direct investment in the first half rose 33 per cent year-on-year, according to the central bank. How come?
The answer is mining. Investment in the mining sector, which has been less affected by government restrictions than others, fuelled the rise in FDI in the second quarter, rising to $478m from $184m in the second quarter of 2011. Continue reading »
Argentina’s government, which has settled with the holders of more than 90 per cent of the nearly $100bn debt on which it spectacularly defaulted in 2001, holds up “disindebtedness” as one of its central policy tenets.
But in the teeth of intensifying currency restrictions, which have made access to dollars highly tricky, companies are apparently opting to take on debt rather than give up their valuable greenbacks.
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Charity begins at home.
Argentina and Brazil, the two most protectionist nations in South America – actually, two of the most protectionist in the world – have discussed an Argentine proposal to hike the common external tariff of the Mercosur trade bloc to a whopping 35 per cent from 22 per cent now. Why? To keep out pesky imports from Asia or the European hunting for markets amid recession in many western countries.
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