May 10, 2019
1. Macri administration seeks consensus with opposition on 10 key points
In a bid to generate consensus with Argentina’s opposition, the administration released a series of topics it hopes to solve as a united front to confront the country’s economic and political crisis. The ten points that seek to put the country on a set path despite the outcome of October’s elections regarding formal employment, fiscal balance, complying with obligations to creditors, among others. The administration hopes to establish a sense of stability a month and a half before ballots are determined, amidst an economic crisis and a fall in Macri’s approval rating. On Wednesday, Interior Minister Rogelio Frigerio met with governors and ex-presidential candidate Daniel Scioli to discuss the points.
2. Trump backs Argentina’s economic agenda
President Macri called his U.S. counterpart Donald Trump, who showed interest in Argentina’s electoral process and reiterated his support for the country’s economic policies. It is worth noting that the U.S. does not look favorably upon the return of Cristina Fernández de Kirchner to the political scene – especially as the U.S. continues its trade war with China. Kirchner revealed what would be her first act as president during a presentation of her book “Sinceramente,” although her candidacy has not yet been confirmed. A White House statement revealed that the two leaders “discussed important Argentine economic reform measures implemented by President Macri, and also discussed regional challenges. President Trump expressed strong support for President Macri’s pro-growth economic agenda and the strides he has made in modernizing the Argentine economy.”
3. Tax burden decreased for automobile exporters
Automobile exporters had their tax burden reduced through an official decree which will reimburse the sector 6.5% of their export value, up from a figure of 2% which was implemented last September as a result of the exchange rate crisis. In this respect, the government took immediate measures to mitigate an emerging crisis in the industry fueled by decreasing exports to Brazil and extensive layoffs and suspensions.
4. New IMF mission will review economic progress to allow for USD $5.5 billion disbursement
The IMF’s technical team began a new review to formally evaluate progress on Argentina’s primary economic goals for Q2 – the fourth such review that will free up stand-by funds as part of an IMF program intended to get Argentina’s economy in shape by 2021. The team will meet with members of the Central Bank, Finance Ministry and labor unions. Once the IMF directorate approves, the fifth disbursement of funds totaling USD $5.5 billion will be released to the Argentine government. With this loan, 78% of the total IMF loan to Argentina will have been disbursed to date.
5. Key component of governing coalition meets to establish electoral agenda
Leaders from the Unión Cívica Radical (UCR) – an important ally of President Macri, and one of the three parties that make up the administration’s Cambiemos coalition – set the date and agenda for their national convention on May 27th in Buenos Aires. The convention will be led by Mendoza Governor and UCR President Alfredo Cornejo. On that date, the UCR will debate their role in the governing coalition in light of October’s national elections. In recent weeks, the UCR demanded greater participation in the Cambiemos’ decision-making, as only one UCR member – Minister of Defense Oscar Aguad – is a part of Macri’s cabinet. They also wish to have more spaces in the list of candidates for Congress, where they already have a solid voting bloc. The convention will take place 17 days before official alliances are finalized.