Argentina is drafting plans to cut its budget deficit to convince nervous investors it can pay its debts and this Monday Finance minister Nicolas Dujovne is scheduled to announce measures, before traveling to Washington to meet with IMF's chief Christine Lagarde.
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.
The Wall Street Journal has published a piece on the political situation of Argentine president Mauricio Macri, battling inflation, an undelivered electoral pledge, and allegedly very much aware of a long standing spell: no non Peronist president has been able to complete the mandate for which he was elected.
Argentina finalized its foreign bond sale plan for 2017 on Thursday, selling 2.75 billion Euros in three bonds in an offering that was more than four times oversubscribed, the Finance Ministry said in a statement.
Argentina’s gross domestic product grew 2.7% in the second quarter versus the same period last year and expanded by 0.7% versus the first three months of 2017, the government’s Indec statistics agency said.
Argentina’s recession deepened in the second quarter as President Mauricio Macri’s efforts to implement free-market reform exacerbated an already flagging economy. GDP fell 3.4% from the same period a year earlier, the largest year-on-year contraction in almost two years, the refurbished statistics agency said in a report published on Thursday.
Inflation in Argentina during the current month of August could drop to 0.7% because of the Supreme Court’s decision to strike down the hikes in natural gas prices for residential users, according to the official stats office Indec. Similar stats also indicate a strong contraction of the Argentine economy.
Argentina’s annual rate of inflation was likely to have reached an annualized 42% through May, but should begin to slow in June with a return to growth also on the horizon, Finance Minister Alfonso Prat-Gay said in an address to investors in New York. The minister also said that for Argentina, Brazil's recession had a greater impact than Brexit.
Argentina's GDP is expected to contract by about 1% in 2016, according to the latest IMF Regional Economic Outlook; Western Hemisphere, announced on Wednesday in Mexico. The chapter on Argentina makes a special mention of the new government's changes to remove macroeconomic imbalances.
Argentina Finance Minister Alfonso Prat Gay revealed on Wednesday that the fiscal deficit registered in 2015 was of 5.8% of GDP and 7.1% of GDP is all debts are computed, and complained that “there has been wasteful spending and when there is an expense it’s not well done.”