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Montevideo, May 26th 2018 - 14:11 UTC

Argentine economy expanded 3.9% in November over a year ago

Thursday, January 25th 2018 - 09:53 UTC
Full article 3 comments
The central bank cut its policy rate to 27.25% on Tuesday from 28% previously, the second straight cut since the government relaxed its inflation target. The central bank cut its policy rate to 27.25% on Tuesday from 28% previously, the second straight cut since the government relaxed its inflation target.
The economic sectors which showed the best improvement in November were the wholesale trade, retail trade and repairs The economic sectors which showed the best improvement in November were the wholesale trade, retail trade and repairs

The economic activity index in Argentina, a proxy for the country's Gross Domestic Product (GDP), rose 3.9% in November from a year before - decelerating from October, when the index posted an annual rise of 5.2%.

 The economic sectors which showed the best improvement in November were the wholesale trade, retail trade and repairs While the electricity, water and gas segment decreased the most.

On a monthly comparison, the Argentine economic activity index rose 0,4% from October.

In related news the country's central bank cut its policy rate to 27.25% on Tuesday from 28% previously, the second straight cut since the government relaxed its inflation target.

The move comes after central bank Governor Federico Sturzenegger said on Monday he expected regulated prices for services like utilities and transportation to rise 21.8% in 2018, below economists’ forecasts and below the 38.7% increase last year as President Mauricio Macri cut subsidies.

That helped cut the deficit to 3.9% of GDP, but contributed to inflation of 24.8%, far above the central bank’s 12-17% target for 2017. Sturzenegger’s comments were widely interpreted as dovish and sent the peso currency tumbling amid expectations of a cut.

“The continuation of the disinflationary process as 2018 begins benefits from more favorable initial conditions than in 2017,” the bank said in the statement. “The contractionary bias in monetary policy is greater, with a real interest rate much higher than at the beginning of 2017.”

In late December, Argentina changed its 2018 inflation target to 15%, up from 8-12% previously, giving the central bank margin to cut rates. In the statement, the central bank said that while its high frequency indicators were giving “mixed signals” about the evolution of prices, the current contractionary bias of monetary policy is “still somewhat elevated.”

Categories: Economy, Argentina.

Top Comments

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  • Enrique Massot

    MP has no fear of posting stories showing how rosy Argentina's economy is getting under the 'best team of the last 50 years.'
    Unfortunately, inflation not only continues--it's already increasing in January fuelled by more energy bills increases.
    The dollar is now about to reach 20 pesos, and while Macri asked Argentines “to think in pesos not in dollars,” the government has tied the price of fuels to the dollar, with gasoline already going up a notch and soon to be followed by other energy sources.
    Wouldn't be nice if things were really improving? Of course. However, while financiers are happy, the street tells a different story than Clarin and MP reflects.
    Which is what happens when a government choses an economy of speculation and indebtedness as opposed to one of production and consumption.

    Jan 25th, 2018 - 05:40 pm 0
  • gordo1

    It seems to me that Enrique Massot fails to appreciate that La Kretina and her motley crew left Argentina in such a fiduciary mess that things may need to get worse before an improvement is seen. Patience Quiquito!

    Jan 26th, 2018 - 09:10 am 0
  • Enrique Massot

    Gordito:

    Oh yeah, I know! It's called “the heavy inheritance we received.”

    However, the fable that says “we have to tighten our belts before it becomes better” has been tried quite a few times before. It may still work for a while; after all, 48 per cent of Argentines still give Macri an approval nod, down from 71 per cent at the beginning of his term early 2016.

    However, the beating the retirees took last December and the offensive to curtail wage increases that is just beginning may convince the elderly and the teachers (who voted in droves for the blue-eyed prince) that their White Knight may become in fact the worse nightmare they've ever had.

    Jan 27th, 2018 - 07:27 am 0
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