Itaú BBA - Macro Scenario – Argentina: Somewhat more pragmatic 

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Macro Scenario – Argentina: Somewhat more pragmatic 

November 13, 2020

The government has made a slight shift toward orthodox economic policies

For the version with all charts and tables, please open the attached pdf file

• The reopening of the economy is advancing in the city of Buenos Aires and its outskirts, while some provinces are tightening mobility restrictions.

• Pressured by declining international reserves, the treasury temporarily reduced export taxes, pledging to rely less on central bank borrowing this year by issuing dollar-linked bonds. The central bank in turn raised short-term interest rates and reversed restrictions on the so called “blue-chip swap (BCS)” market for dollars. 

• While we see these steps as positive, they are no substitute for a meaningful fiscal consolidation and less interventionism. We forecast a GDP contraction of 12.0% and inflation of 37% for this year (despite price controls), followed by modest GDP growth (4.5%) and higher inflation (50%) in 2021.

João Pedro Bumachar
Juan Carlos Barboza
Diego Ciongo

For the version with all charts and tables, please open the attached pdf file



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