By Anne Krueger (*) - Argentina's President Mauricio Macri knew that he had inherited a sick economy when he took office in 2015, but failed to take his medicine. As a result, the country now has no choice but to face up to a period of painful structural adjustment.
Protesters opposed to proposed austerity measures clashed with police outside Argentina's Congress on Wednesday as lawmakers discussed next year's budget. Dozens of people threw rocks while police in riot gear responded with rubber bullets and water cannons. Local television said that at least twenty-seven people have been detained but there were no confirmed reports on injuries.
Argentina's GDP will fall 2.6% and inflation will reach 40% this year, according to the International Monetary Fund's Global Perspectives Report released Monday at the beginning of the body's annual Assembly in Bali, Indonesia.
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.