May 3, 2019
1. Argentine Central Bank eliminates “non-intervention zone” to contain exchange rate
With the endorsement of the IMF, the Monetary Policy Commission of Argentina’s Central Bank opted to eliminate the exchange rate “non-intervention zone” and resume selling U.S. dollars to reduce the Argentine peso’s volatility. With this announcement, in the case that the price of USD $1 exceeds ARS $51.45, the Central Bank will sell USD $250 million in reserves daily as opposed to USD $150 million, the Bank’s current policy.
2. Economic activity increases 0.2% in February over January
The Argentine statistical institute announced that its economic activity index for February increased 0.2% compared to January. In the same vein, the Finance Ministry stressed that it was the third month of non-seasonal consecutive growth, added to positive figures for industry, construction and commerce – the most affected industries in year-over-year comparisons. Nonetheless, economic activity fell 4.8% in February compared to the same month in 2018, affected primarily by the low performance of the manufacturing sector as well as stifled consumption. In the first two months of the year, economic activity decreased a total of 5.3% compared to the same period last year.
3. Argentina’s OECD bid gains support, new trade agreements reached
The Center for Strategic and International Studies, an influential Washington D.C.-based think tank, declared its support for Argentina’s bid to join the OECD, and encouraged its 36 member countries to advance its candidacy to official membership. On the other hand, private enterprises in Argentina and Belgium deepened commercial ties, which currently stand at USD $1 billion annually, at the Buenos Aires Smart City fair. Following his government’s objectives regarding foreign affairs, President Mauricio Macri announced the opening of the Chinese market for Argentine pork products. Pork exports increased 41% in the first two months of 2019 compared to the same period in 2018.
4. Renewable energy sector has investment potential of USD $15 billion
According to the Argentine Investment and International Trade Agency, 135 renewable energy projects are under development in the country totaling USD $7.2 billion. Of the total, 36 have already begun operations in the provinces of Buenos Aires, Santa Fe, Chubut, Santa Cruz, Córdoba, La Rioja, Río Negro, San Juan, San Luis, Misiones y Catamarca. On the other hand, according to Argentina’s wholesale electrical administrator (CAMMESA), the Argentine Interconnected System demanded 11,494 MW of energy, of which renewable sources made up 1,025 MW – 8.9% of the total. The Argentine Investment and International Trade Agency also stated that the government has a plan to accelerate the transition to clean energy sources. It is forecasted that 20% of Argentina’s energy will come from clean sources by 2025.
5. Labor unions march for labor reform, special labor commissions and a higher minimum wage
On April 30th, the truckers union and dissident labor unions led a march to announce their opposition to any sort of labor reform, more opportunity for special labor commissions that allow a direct avenue for workers to speak with management, and an emergency increase in the minimum wage. The march drew support from the CTA trade federation and social movements but did not have the backing of the national trade union federation, the CGT, reflecting the divisions between labor unions. Additionally, marchers had a strong opposition slant and were not only called on to demand changes to the government, but also to pressure the CGT to define a date for a general strike.