Argentina: Activity is Shrinking but that is the Price to Stabilize

April 26, 2024 5:52 PM UTC

The INDEC data for February reveals a 0.2% economic shrinkage, signalling a 5.1% drop since August 2023, potentially leading to a Q1 2024 recession. High inflation and fiscal adjustments are primary causes. Some foresee 0% April inflation due to price realignment and stable ARS. Despite low reserves

Central and Latin America: Country Risk Ratings

April 18, 2024 9:00 AM UTC

We provide country risk reviews for Central America countries including Brazil/Mexico/Peru/Argentina/Cuba and El Salvador.  

Argentina CPI Review: Small Improvements Amid the Uncertainty

April 14, 2024 1:26 PM UTC

The INDEC's March CPI data reveals an 11.0% increase, down from February's 13.2%. Annually, Argentine CPI rose by 287% (Y/Y), with core CPI below 10%. Despite past shocks, we foresee continued monthly CPI slowdown. Argentina focuses on fiscal measures and on stabilize the exchange rate to accumulate

Outlook Overview: Europe in Focus, Then Elections Around the World

March 25, 2024 11:15 AM UTC

LatAm Outlook: Getting Deeper in the Cutting Cycle

March 22, 2024 7:04 PM UTC

·       Brazil and Mexico growth will decelerate from the growth rates seen in 2023. The stronger basis of comparisons in 2023 and the tight monetary policy will diminish growth during 2024. Brazil robust agricultural growth will not repeat in 2024, while Mexico growth is restrained by a tigh

Argentina CPI Review: Inflation Eases in February to 13%, but it Still a Long Road

March 13, 2024 8:09 PM UTC

The February CPI release by Argentina's INDEC shows a slight ease in inflation to 13.8% (m/m), yet on an annual basis, it has soared to 276%, hitting a record high since the 1980s. Major increases were noted in Transport (21%), Food and Beverages (11%), and Housing (20%). While indicating initial im

Argentina: CPI grows 20.6% in January

February 15, 2024 1:26 PM UTC

Argentina's CPI surged in January, marking a 20.6% increase (m/m), the highest globally. Annual figures show a staggering 254% rise. The rise was influenced by the exchange rate devaluation and the release of controlled prices. Only in April we will probably see a CPI cleaned from this noises. The g

Argentina: Milei’s First set of Laws Rejected in the Chamber of Deputies

February 7, 2024 12:53 PM UTC

JJavier Milei's ambitious deregulation laws for the Argentine economy faced rejection in the Chamber of Deputies, signaling challenges in negotiating with the current Congress. Milei's government must now revise its strategy, possibly focusing on less contentious issues. Despite setbacks, the govern

Argentina: Road to stabilization will be bumpy

January 24, 2024 9:38 PM UTC

Javier Milei's administration, despite securing an IMF deal, faces hurdles in stabilizing Argentina. Targeting a $10 billion increase in net reserves, equivalent to a quarter of the country's gross reserves, may prove overly ambitious. Contentious laws in Congress lack consensus, sparking opposition

Latin and Central America: Country Risk Ratings

January 22, 2024 10:00 AM UTC

We provide country risk reviews for Latin and Central America countries including Argentina, Brazil, Chile and Mexico.  

Argentina: Milei’s Emergency Decree Will Test Congress Support for His Agenda

December 21, 2023 1:58 PM UTC

After a day of subdued protests organized by social organizations, Javier Milei took to television to announce a series of measures aimed at deregulating the Argentine economy. Milei's objective is clearly to transition from a state-led economy to a pro-market economy as quickly as possible. His dec

EM FX Outlook: USD Decline v Inflation Differentials

December 19, 2023 9:59 AM UTC

·        In spot terms, we see the Indonesian Rupiah (IDR) and Malaysian Ringgit (MYR) rising against the USD as Fed rate cuts narrow interest rate differentials and a move away from an overvalued USD occurs.  Brazilian Real (BRL) and Mexican Peso (MXN) will likely be stable against the USD

LatAm Outlook: Diverging Paths in 2024

December 15, 2023 12:25 PM UTC

Our Forecasts
Risks to Our Views
Source: Continuum Economics
Brazil: Switching Back to Slow Growth?
Brazil growth has finally begun to decelerate (here), as the growth in the third quarter dropped to 0.1% (q/q). However, growth for 2023 is expected to stand at 3.2% (Yr/Yr) which is quite a bit higher th

Argentina: Tentative Shock Plan Announced

December 14, 2023 3:50 PM UTC

Figure 1: Argentina Exchange Rate (ARS/USD)Source: Refinitiv and MEF
Argentina's new Economic Minister, Luis Caputo, has unveiled the initial economic measures under Javier Milei's administration, focusing on addressing the root cause of Argentina's economic woes—the fiscal deficit. In a 16-minute

LatAm: Long Term Growth Differences

November 24, 2023 11:52 AM UTC

We see different patterns of growth for the Latin American countries. Brazil, Mexico and Argentina have different types of constraints that will define their long-term growth.
Figure 1: Annual GDP Growth
Source: Continuum Economics. *forecasts
We observe that the long-term growth trajectory for Brazil

El niño impacts on Latin America: a headwind for Brazil

November 22, 2023 11:30 AM UTC

El Niño is a climate pattern that makes Pacific Ocean waters warmer and, consequently, triggers extreme weather conditions in Latin America (LatAm) economies. However, its impacts among the LatAm countries varies. In some regions, this climate phenomenon causes severe droughts, impacting agricultur

Argentina: Javier Milei wins the Election, Uncertainty Mounts

November 20, 2023 1:26 PM UTC

Argentinians have elected Javier Milei to lead the country for the next four years, defying expectations set by most polls. Despite a marginal advantage predicted for either candidate, Milei secured a comfortable victory over Sergio Massa, obtaining 55.7% of the votes, while Massa gathered only 44.3

Argentina Elections Run-off: An Open Race

November 16, 2023 5:44 PM UTC

Argentina is poised for a crucial electoral decision on November 19, determining the occupant of the Presidential seat on December 10. The contest features the far-right Libertarian candidate, Javier Milei, against Sergio Massa, representing the ruling Peronist coalition. Polls present a divided out

Argentina CPI Review: Prices Freeze led to a slowdown on inflation

November 14, 2023 5:17 PM UTC

Figure 1: Argentina CPI by Groups (m/m, %)
Source: INDEC
The Argentina National Statistics Institute (INDEC) has recently released the Consumer Price Index (CPI) data for October. According to the data, Argentina's CPI witnessed an 8.3% month-on-month increase. Despite the elevated inflation levels fo

Argentina: Third Place Bulrich Announce Milei’s Support

October 26, 2023 3:13 PM UTC

Patricia Bullrich, the presidential candidate for 'Juntos por el Cambio' and the third-place contender in the elections, has recently announced her personal endorsement of Javier Milei. Notably, this decision stands independently from the stance of the remaining factions within the coalition. 'Junto

Argentina Elections: Massa Surprises and Will Dispute a Tight Run-off with Milei

October 23, 2023 4:03 PM UTC

Figure 1: Votes for President (%)
Source: La Nacion
On October 22, Argentina held its elections, yielding surprising results. Sergio Massa secured 37% of the votes, marking a significant 9-percentage-point increase from the national primaries, where he had gathered 28% support. The far-right candidate

Latin and Central America: Country Risk

October 18, 2023 9:23 AM UTC

Latin and Central America Regional Overview
During the last quarter, Brazil experienced a period of relative stability with no major significant events. President Lula has maintained his position of authority, while the opposition forces remain comparatively subdued. Some changes in the cabinet were

LatAm Outlook: Growth Continues

September 28, 2023 8:46 PM UTC

Our Forecasts
Risks to Our Views
Source: Continuum Economics
Brazil: Brighter than Expected
The Brazilian economy has surpassed expectations in the first half of this year. In the initial quarter, robust growth was predominantly driven by an exceptional surge in the agricultural sector, as soybean produ

BRICS Band Expands: New Harmonies in Global Orchestra

August 31, 2023 10:57 AM UTC

Following the summit in Johannesburg last week, the South African President Cyril Ramaphosa announced that six new candidates have been selected to join the BRICS group, and will formally become members on January 1, 2024. This includes Iran, Saudi Arabia, Ethiopia, UAE, Argentina and Egypt. The inv

BRICS: Political Breakthrough, but No Common Currency

August 29, 2023 10:16 AM UTC

The BRICS summit agreement to offer membership to six additional countries (Argentina, Egypt, Ethiopia, Iran, Saudi Arabia and UAE) is a political breakthrough for China/Russia and others that feel that U.S. centric global system and institutions are not providing a fair approach for large EM countr

Argentina: Post Primaries Devaluation

August 22, 2023 1:32 PM UTC

Figure 1: Official and Black Market Exchange Rate (ARS/USD)
Source: BCAR and Refinitiv
Following the unexpected triumph of far-right candidate Javier Milei in the Argentine Primaries, a comprehensive set of measures has been unveiled by the Argentine Government. Notably, a 21% devaluation of the offi

Argentina Primaries: An Open Three Horses Race

August 14, 2023 8:12 PM UTC

Figure 1: Votes in the National Primaries for Presidency (%)
Source: La Nacion
Argentina's National Primaries Election took place on August 13th, serving as a crucial preliminary step in determining the final candidates for the upcoming general election scheduled for October 22nd. Currently, three mai

Argentina: New Staff Level Agreement with IMF Reached

July 31, 2023 2:27 PM UTC

Figure 1: Argentina Gross International Reserves (USD Bn)
Source: BCRA
Argentina has reached a new agreement with the IMF concerning their existing deal. The recent severe droughts have made it evident that the quantitative targets of the previous agreement would not be achieved, necessitating negotia

Latin and Central America: Political and Other Risks

July 19, 2023 7:20 AM UTC

Latin and Central America Regional Overview
In Brazil, a significant development unfolded recently with the disqualification of former President Jair Bolsonaro, making headlines across the country. The Superior Electoral Tribunal found him guilty of misusing official communication and engaging in ec

Argentina: Elections Shapes up

July 18, 2023 4:53 PM UTC

Argentina's upcoming election is taking shape, with Presidential candidates for the primaries now well-defined. The ruling coalition, now operating under the new name "Unión por la Patria," has nominated two candidates: Economy Minister Sergio Massa and youth leader Juan Grabois. On the other side,

LatAm Outlook: Lower Inflation and Growth above Expectations

June 21, 2023 9:27 AM UTC

Our Forecasts
Risks to Our Views
Source: Continuum Economics
Brazil: Higher Agricultural Production and Lower Inflation
The Brazilian economy experienced robust growth in the first quarter of 2023, with a notable expansion of 1.9% quarter-on-quarter (here). This growth was primarily driven by a remarkab

Argentina: Small Recover Delays the Recession Threat for Now

May 26, 2023 2:14 PM UTC

Figure 1: Argentina Activity Index (2019 = 100, Seasonally Adjusted)
Source: INDEC
The Argentine National Statistics Institute (INDEC) has released the estimation of its monthly activity indicator. The released data suggest that the Argentine economy has recovered during the first months of the year.

Argentina: Inflation Uproar

May 16, 2023 2:35 PM UTC

Figure 1: Argentina Inflation (%)
Source: INDEC
Argentine inflation came as a surprise in April, surpassing expectations. The Bloomberg market survey projected a 7.5% (m/m) increase, but the figures released by the National Statistics Institute (INDEC) revealed a higher growth of 8.5% (m/m). Consequen

Argentina: Economic Chaos Continues

May 5, 2023 1:05 PM UTC

Figure 1: Argentina Gross International Reserves
Source: BCRA
Argentina reserves have dropped to the lowest levels in 7 years. Initial estimates points that Argentina is likely to loss USD 3.5 Bn in grain exports due to the severe drought in 2023, which will affect the capacity of the Central Bank of

April 27, 2023 1:06 PM UTC

Mexico:
Figure 1: Mexico Exports and Imports (12 months sum, USD Bn)
Source: INEGI
Mexico’s main trading partner is the United States, which corresponds to 80% of their exports values. Additionally, Mexico is a relatively open economy as trade corresponds to around 40% of Mexican GDP. The main story

Argentine Elections: Incumbent President Fernandes Withdraws from the Race

April 25, 2023 12:34 PM UTC

On a suddenly move, incumbent President Alberto Fernandes has withdrawn from the electoral race. In a 7 minutes’ video posted on his social networks, the President stated that he will work toward a smooth succession to whoever wins on the ballots in October. There have been many clashes within its

Argentina: CPI Continues its Upward Trend

April 17, 2023 4:56 PM UTC

I
Figure 1: Argentina CPI (%, y/y)
Source: INDEC
Argentine statistics institute (INDEC) has released inflation data for March. Unsurprisingly, inflation has continued its upward trend reaching 104.2% (y/y) by growing 7.9% (m/m) during March. Food inflation, which affects mainly the poorest have registe

Argentina: IMF Deal Relaxed; The New Agrodollar

April 6, 2023 7:05 PM UTC

IMF Deal Relaxed
The IMF has concluded the fourth review of their deal with Argentina. On the document, they stated that all the targets set for the program for the Q4/2022 were fulfilled, namely, the primary target of 1.9% of the GDP, the ceiling for the monetary financing of the Treasury at 0.8% of

LatAm Outlook: Putting the Gears Down

March 24, 2023 3:09 PM UTC

Our Forecasts
Risks to Our Views
Source: Continuum Economics
Brazil: Handbrakes on
The Brazilian economy has begun to show signs of deceleration as the effects of the contractionary policy are starting to be felt. Q4 GDP (here) has marginally contracted (-0.2% q/q), and the strong impetus that the servi

March 23, 2023 6:59 PM UTC

Figure 1: Argentina’s GDP (2019 = 100, Seasonally Adjusted)
Source: INDEC and Continuum Economics
Argentine National Statistics Institute (INDEC) revealed the GDP figures for the last quarter of 2022. In line with other activity indexes (here), the GDP figures shows a strong contraction during the l

Argentina: IMF Quarterly Review Concluded, Inflation Surpasses the Triple Digits.

March 16, 2023 2:15 PM UTC

IMF has concluded the fourth quarterly review of the USD 50Bln deal with Argentina and concluded that all Q4-2022 targets were achieved, which would allow a further disbursement of around USD 4Bln to occur. Indeed, Argentina was able to comply with the 2.5% fiscal deficit, and the accumulation of ne

Argentina: Activity Index Shows a Strong Contraction in Q4

February 27, 2023 1:36 PM UTC

Figure 1: Argentina Monthly Economic Activity Index (2004=100, Seasonally Adjusted)
Source: INDEC
Argentine National Statistics Institute has released its monthly economic activity index for December. The index has contracted for four consecutive months and accumulated a 1.7% fall during the last quar

Argentina: Inflation Reaching Triple Digits

February 17, 2023 1:53 PM UTC

Figure 1: CPI Inflation (y/y)
Source: Indec
January CPI came hot in Argentina. The index grew 6% despite the government efforts to manage price increases through the Fair Prices Measure (here). The y/y index reached 98%, the biggest since Argentina hyperinflation of the early 1990’s. The inflation i

Argentina Politics: Incumbent President Fernandes Set not to Be Re-elected

January 18, 2023 1:43 PM UTC

Complex Economic Situation
Inflation in Argentina has risen to the highest since its hyperinflation years in 1991. The y/y figure reached 95%. Although it avoided triple digits as many market participants were previewing, Argentina registers one of the biggest inflation in the world and getting out o

Argentina: Partial Devaluation

September 9, 2022 1:10 PM UTC

Figure 1: Official and 'Blue' Dollar
Source: BCRA, Refinitiv, Continuum Economics
The Argentine government has listened to soybeans producers' claims and created a new FX line for them. Since June, soybean producers had been holding back stocks and refusing to deliver exports, which prevents the Argen