Argentina's economy shrank 5.8% in May versus the same month last year, government statistics agency Indec said on Tuesday, the second straight month of declines in a sign of looming recession and a possible GDP contraction in 2018.
Argentina posted a primary fiscal deficit of 105.8 billion pesos (US$3.7 billion), or 0.8% of gross domestic product (GDP) in the first half of 2018, government data showed on Thursday, down 26.7% from the same period last year.
Index provider MSCI said on Wednesday it will reclassify Argentina as an emerging market and begin including Saudi Arabia in that classification, sharply broadening the investor base for both countries in a move that could be supportive of their equity markets. The decisions will be effective beginning in mid-2019.
Following twelve hours of heated and at time acrimonious debate the Argentine Senate on early Thursday voted, 37 to 30, to freeze utility prices. President Mauricio Macri had anticipated that if the bill was passed he would veto it because there is no way the budget can stand an additional 1% of GDP deficit.
Argentina has much in common with yesterday's emerging markets, but little in common with today's
International Monetary Fund chief Christine Lagarde said on Thursday she is ready to aid Argentina and wants talks on a financing package to be finalized quickly. Lagarde said she instructed the IMF team to continue discussions on a loan program with the goal to “reach a rapid conclusion.”
After several days up in Argentina, the devaluation of the Argentine peso and the rise of the US dollar have had some impact on the other side of the River Plate, where the exchange houses of downtown Montevideo marked on Wednesday the value of the currency up to 31,70 Uruguayan pesos per dollar, a rise of 2.08% compared to Monday —the highest in five years—. For the Uruguayan government, the country follows the global trend and calls for calm, beyond the noise generated in Argentina, which is beginning a dialogue between the Finance Minister, Nicolás Dujovne, and the International Monetary Fund (IMF) in Washington.
Argentina's economy expanded 2.9% in 2017 from the prior year and 3.9% in the fourth quarter versus the same period in 2016, the Indec statistics agency said this week. The year-over-year figure was slightly above the 2.8% annual growth rate given last month by Argentina's monthly economic activity indicator, seen as a proxy for gross domestic product.
The Argentine powerful teamsters union will be holding their first political rally in downtown Buenos Aires this Wednesday in a clear defiance of President Mauricio Macri's policies to combat inflation, launch the economy and attract foreign direct investors. Hugo Moyano a member of the unions' umbrella organization has promised to convene some 300.000 workers and has anticipated that any incidents will be the responsibility of the government.
Argentina's economic recovery picked up speed in July, expanding 4.9% from a year earlier as President Mauricio Macri's pro-growth policies appeared gain traction. July's year-over-year expansion is the highest posted by Argentina in more than two years and it moves the country closer to hitting its target of 3% growth this year.