September 13, 2019
1. President Macri and Finance Minister Lacunza will travel to U.S. in anticipation of IMF disbursement
President Mauricio Macri will travel to the UN General Assembly in New York at the end of the month, accompanied by Finance Minister Hernán Lacuzna will meet with key figures in the banking and investment sectors. The two will then travel to Washington DC with an agenda featuring the World Bank, the Inter-American Development Bank (IDB) and a possible private meeting with Acting IMF Director David Lipton, who will remain until Christine Lagarde’s replacement, Kristalina Georgieva assumes the role. President Macri has not yet confirmed a meeting with U.S. President Donald Trump. Meanwhile, Frente de Todos candidate and frontrunner Alberto Fernández tasked Tucumán Governor Juan Manzur with making inroads with the White House should he win October’s presidential elections. Manzur, one of Fernández’s most fervent supporters, will travel to the Woodrow Wilson Center, a Washington-based think tank with close ties to the federal government. His agenda also includes an informal meeting with the Argentine Embassy and will meet with State Department officers from Southern Cone Affairs.
2. August registers second highest inflation figures in 2019
Argentina’s national statistical agency (Indec) reported a monthly inflation figure of 4% for August – the second highest monthly percentage of the year – higher than the previous month, which had the lowest (2.2%). In the last 12 months, inflation has reached 54.5%. Following the 33.58% depreciation of the Argentine peso in the wake of the last month’s primary elections, the Government had planned on a high level of inflation for both August and September. Moreover, the government will submit Monday its 2020 budget to Congress with assumptions of -1% economic growth – a number largely driven by an advancing export sector, annual inflation of 34%, an average exchange rate of ARS $67 to USD $1 and current account surplus of 0.4% of the GDP for 2020.
3. Government looks to confirm bonus for private sector workers
Production and Labor Minister Dante Sica confirmed that private sector workers, as well as those in the public sector, will receive a bonus of ARS $5,000 (USD $88). This issue was one of the demands made to Minister of Social Development Carolina Stanley by Argentina’s largest and most important labor union, the General Confederation of Labor (CGT). The Government has not yet made the measure official, as most major business chambers and business organizations have opposed it. Argentina’s medium-sized business chamber (CAME) stated that “many SMEs are in a critical situation, they have not been able to pay their wages.” President Macri on the other hand, assured that everyone must “do their part” to change the country’s economic situation.
4. Alberto Fernández meets with business leaders
Alberto Fernández met with Miguel Acevedo – head of the Argentine Industrial Union (UIA) one of the most important chambers representing some of the country’s largest businesses – who Fernández considers key to securing his planned “Social Pact” between the government, business leaders and workers. The meeting occurred two weeks after Fernández received the Mesa de Enlace, an agriculture business chamber aligned with the Macri administration and supported him during August’s primaries.
5. New business with China for USD $1.6 billion, Vaca Muerta shale formation investments
The Government won a new market for soy flour in China, Argentina’s primary export product generating approximately USD $10 billion per year. Soy flour makes up nearly 70% of the soy sector’s total sales. The agreement was made after 20 years of negotiations between the two countries. At the moment, the majority of Argentina’s exports to China include grains and soy oil. According to an official statement from the Agriculture Ministry, the agreement “represents a great opportunity to enter the world’s largest vegetable protein consumer for the livestock sector,” since China “counts with more than 500 million heads of cattle and pigs.” In the same vein, the director of the U.S. Overseas Private Investment Corporation (OPIC) approved financing for development projects in the Vaca Muerta shale formation, renewable energies and a roadway corridor by means of a USD $1.1 billion public-private partnership – a project the Macri administration sees as vital to change Argentina’s economic fortunes in the medium and long term.