May 31, 2019


1. Government launches plan to triple exports

In the context of a collapsed domestic market and a more competitive exchange rate, the Argentine government seeks to incentivize businesses to sell their products to the world. With this objective in mind, a national export development plan was launched at the Argentina Exports Forum – looking to triple the country’s annual exports to USD $193.1 billion and quadruple the number of exporting businesses to 40,000 by 2030. President Macri fully endorses the plan, “I invite you to innovate and make exports a central part of business. This is the moment to display all of our talent,” he stated at the forum.

La Nación: El Gobierno lanzó un plan para triplicar el monto de las exportaciones

2. Argentina’s GDP projected to fall two years in a row

A larger than expected drop in economic activity in March led various analysts to further cut their GDP expectations for this year. There are few doubts – even among Macri administration officials – that the year will end with another drop in the economy of at least 0.8%, according to Finance Ministry forecasts. Given these predictions, it will be the first time since Argentina’s exchange rate crisis in 2001 and 2002 that the economy experiences two consecutive annual drops in GDP: the 2.5% fall in 2018 and whatever figure is registered at the end of 2019.

El Cronista: El PBI encadenará dos años de caída por primera vez desde 2002

3. Low in consumption and wages under inflation

Argentina’s national statistical agency (Indec) released a report revealing that sales in supermarkets dropped 14.5%, wholesale auto services plummeted 16%, and sales in shopping malls registered a 16.6% tumble compared to March 2018 – all this without taking into account the impact of inflation. The sectors that have registered the sharpest downturns in March include electronics, home goods, clothing, footwear and textiles, processed foods, take-out foods and beverages.

In addition, according to the Salaries Index of the entity, there was an increase in assets of 4% in March and accumulated an increase of 38.5% in the last 12 months. The indicator was thus below monthly inflation of 4.7% and annual inflation of 54.7%.

Clarín: Sigue el derrumbe del consumo: las ventas en supermercados cayeron 14,5%

4. Court ruling demands Argentina pay USD $320 million for expropriation of Aerolíneas Argentinas

Argentina lost a multimillion-dollar court case to Spanish multinational Marsans for the expropriation of Aerolíneas Argentinas at the International Centre for Settlement of Investment Disputes (ICSID), the World Bank’s tribunal in Washington D.C. As a result, the Argentine government must pay Marsans more than USD $320 million – 11 years after Cristina Fernández de Kirchner’s administration expropriated the airline. The ruling nullified Argentina’s appeal of the court’s 2017 decision, also favoring Marsans. “Argentina’s appeal has been rejected,” stated the ICSID decision. “Argentina must cover court costs from the proceedings and pay the plaintiff an additional USD $1,017,512 for representation costs and all other rejected claims.” The Government is committed to the last instance that remains to reverse a negative ruling that will consume the equivalent of a year and a half of subsidy for the airline.

Perfil: Argentina deberá pagar US$ 320 millones por expropiar Aerolíneas Argentinas

5. Electoral Panorama

Following its annual convention, the Unión Cívica Radical (UCR) ratified its support of President Macri’s Cambiemos coalition and demanded an expansion of the coalition to include other factions opposed to Cristina Fernández de Kirchner. On the other hand, last Wednesday marked the second strike in one month against the Macri administration. Finance Minister Nicolás Dujovne estimated that the general strike caused losses of over ARS $40 billion (USD $889.4 million) – approximately 0.22% of the country’s annual GDP. In this context, vice-presidential candidate Cristina Fernández de Kirchner confirmed that former Economy Minister Axel Kicillof would be the Peronist candidate to lead Buenos Aires Province, a district with 37% of the total national electorate.

La Nación: Convención radical: la UCR seguirá en Cambiemos, pero pidió ampliar la coalición