November 22, 2019
1. OECD: Argentine economy to shrink at slower pace in 2020, begin to grow in 2021
The Organization for Economic Cooperation and Development (OECD) projected that Argentina’s economy will drop 3% by the end of this year, fall 1.7% in 2020 and return to growth in 2021. According to the OECD, internal demand in the country will continue to decline through the end of next year as, “the stabilization of the economy will take time and macroeconomic policies are still strict.” Additionally, the multilateral entity forecasted that exports will lead the economic recovery in 2021, thanks to a more competitive exchange rate.
2. IMF yet to see details on Alberto Fernández’s economic plan
Following a call between Argentine President-elect Alberto Fernández and IMF chief Kristalina Georgieva, the IMF specified its desire to see the “full plan” proposed by the president-elect before negotiating a new financial arrangement. IMF director for the Western Hemisphere, Alejandro Werner, confirmed in an interview that they are willing to work with the new government with “the objective of helping Argentina redesign a new program that will lead once again to growth and halt inflation.” He also expressed concerns about the rapid rise in debt and wishes to see the full plan to gauge whether or not it takes these high levels of debt into account.
3. Fernández: “My most important partners will be exporters”
In an interview, Alberto Fernández reiterated his position on withholdings taxes on exports: “We have to make the economy work again. It is what I called in the campaign an ignition of the economy […] My most important partners in this government will be the export sector, because they bring foreign currencies.” He continued, “in the new Argentina, we will all have to make an effort. Petroleum, mining and agriculture – and all producing sectors will have to make an effort.” Fernández also stated that he would not charge withholdings, but the economic situation demands it. In September 2018, to secure an IMF loan of USD $57.1 billion and to comply with the reduction of the fiscal deficit, then-Minister of Finance Nicolás Dujovne decided to apply withholding taxes to all exports, a situation that continues to this day, a policy still in effect today.
4. Chamber of Deputies passes two key laws with social impacts
In the last ordinary congressional session of the year, the Argentine Chamber of Deputies passed two key social-focused bills: one that establishes conditions for rent and the “gondolas law”, which hopes to encourage competition among nutritional items and household cleaning products in supermarkets, by cutting down on the abuses made by dominant brands in Argentine supermarkets. An additional law was passed that will formalize the fight against climate change into a state policy, essentially establishing the entities that were outlined in Decree 891/2016. The bill has three main objectives: establish policies dedicated to studying the impacts of climate change, promote strategies to reduce the emission of greenhouse gases, and cut down on the vulnerability of both human and natural life in the face of climate change
5. Representatives of the current and next governments met to organize the transition
In the framework of the transfer of the government, Chief of Staff Marcos Peña and confidant of the president-elect, Santiago Cafiero, met at least twice in the last ten days. In addition to the transfer of power, the two delineated a protocol for the inauguration on December 10th and the passing of ceremonial symbols of power. According to what was agreed, Alberto Fernández will take the oath of office before Congress, while Macri will hand over the sash and baton to Fernández in front of the Legislative Assembly moments after. Following these events, Fernández will make his first speech as head of state, while Macri will head to his retreat in Los Abrojos. Later on, President Fernández will swear in his cabinet at the Casa Rosada and give his first speech as president.