Economy

Argentina Economic Outlook

Recent data suggests that the economic recovery has stumbled. While data from the real sector is positive, with economic activity expanding in December and industrial production rebounding in January, there is growing evidence that imbalances are building. In January, a surge in capital goods imports caused the trade deficit to widen further, and the fiscal deficit grew considerably on increased interest payments. Prospects of growing current account and fiscal deficits are worrying, as they could derail ongoing efforts by President Macri to reform the economy. These two deficits, together with untamed inflation, pose a major immediate challenge to the government. Salary negotiations between the government and labor unions are currently underway and demands to equate salary increases to rises in the inflation rate would inevitably increase fiscal spending and keep the budget deficit elevated, forcing the government to continue seeking.

Information Source: https://www.focus-economics.com/countries/argentina