Argentine economy suffering from a mix of stagnation and strong inflation
The stagnation of the Argentine economy at the end of the first half of the year is “palpable” and so is tension in the money exchange market because of the restrictions on the purchase of US dollars imposed by the government of President Cristina Fernandez, according to a report from economic advisors Ecolatina from Buenos Aires.
“The closing of the first half of 2012 has not been encouraging” said Ecolatina adding that in the second quarter of the year “there was an inter-annual drop in three sectors considered crucial for the Argentine economy: agriculture, construction and manufacturing”.
Furthermore the cooling is beginning to debilitate the labour market and consumption, warned Ecolatina economic consultants, which was founded by former Economy minister Roberto Lavagna.
Besides the “palpable” stagnation of the Argentine economy, the situation has become complicated because “inflation does not yield, the exchange money market tension persists, the fiscal situation is deteriorating and international reserves have not grown”.
The regression of economic expectations in Argentina “brought greater uncertainty and lack of confidence which echoed in investment decisions which are expected to have fallen five percentage points in the first semester”.
Ecolatina said the construction index dropped 0.1% in the six months and the imports of capital goods, in volume, collapsed 24% in the first five months of the year.
Nevertheless what is surprising is the resistance of the inflationary process because despite a lesser dynamism from domestic demand, the increase is prices has remained sustained in the first half of the year, indicates the report.
“If to this we add the greater emission to help finance the treasury, inflationary pressure are bound to persist even in a recession scenario”, forecasted Ecolatina.
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Etc etc etc....
Agreed. Here we see Cristina's economic model in action. If they made this into a film, it would be classed as a disaster movie.
The answer is she needs to accept and sort out inflation now! Agenda item number 1: Employ a fing economist not a peronist boot licker.
Next is hyperinflation as they devalue the peso to make their products “more competitive” of course that won't work it will only increase all the production costs and salaries. Vicious loop and it is only going ot get worse since CFK understand economics as much as Axel or Guzz.
Getting exciting.
Sorry its in Spanish but I think it would be hard for others to argue with your prediction after this annoucment,
www.cronista.com/finanzasmercados/El-Central-avala-expectativas-de-devaluacion-del-20-en-los-proximos-doce-meses-20120712-0049.html
www.buenosairesherald.com/article/105945/argentina-venezuela-to-sign-military-agreement
Did you hear about the new “militant” movement that Kirchners are starting that will make “La Cámpora” look like a group of kids in nursery school? It's called “Vatayon”, it's a Kirchner backed group that goes into the prisons of Argentina to recruit supporters for their political movement. This is frightening!
www.facebook.com/#!/vatayonmilitante
I think Toby laughed at me when I said 10-14/1 shortly. I still think I am right. I may be off by a few months but the graph never lies.
Their only hope is to buy sugar and laundry detergent...it will be worth more than silly pieces of paper in the very near future.
Everything with the Argentine economy is currently poiting towatds stagflation, hyper inflation and collapse. If you stopped reading your government santioned crap and looked at what independent anaylst are saying you would see the problem. Argentines problems is that it has grown to large to quick (9% growth a year is not sustanaibily in the long term,) this has led to the inflation problems which underpin the entire economic situation.
Roberto Lavagna was Nestor's Economy Minister, the architect of the deafault and the “Chinese” growth, until 2005. He resigned because Kirchner would not change the “model” to put a break on the growth which was averaging in 2005 9.6%.
Lavagna said it was too high and would lead to galloping inflation, he was right, he left and Fester sacked all the statiticians in INDEC, and sterted the lies about inflation, GDP etc.
In other words the problems of success. Nice to see you recognise the success =)
she did not run and hide when,the junta came,she resisted was captured and tortured,(her father died under torture) helping the poor,while in office,she started a sovereign wealth fund from Chile,s copper mining,encouraging investment from abroad(instead of scaring it away)did not dissipate her country,s wealth on useless populist subsidy's .Here,s figure you can really admire,British kirchnerist,I suggest .May she return next year.
275/171 * 4 = 6.43 which ought to be the exchange rate now, if Argentina were to stay competitive, that is.
#18 I do admire Bachelet, and hope she comes back (unlike the rightwingers on here who are terrified of that prospect!) Cristina and Michelle were allies and friends of course...
The big difference between these two women is that Bachelet puts her country before her politics and Kretina puts her own pocket before everything.
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