Day: March 26, 2020

The weakness of the real complicates Argentina

So far in 2020, Brazil was the G-20 country whose currency depreciated the most against the dollar: the real dropped by about 25% in the year. This situation may add a new problem to the Argentine economy, since the devaluation of the neighbouring country reduces the competitiveness of local goods, precisely against the essential partner.

GDP fell 2.2% in Argentina

GDP fell 2.2% announced on Wednesday INDEC, so the accumulated fall during 2019 was 2.1%. The collapse of 5.8% in the first quarter explained most of the recession. According to data released by INDEC, the only component of the product that grew during 2019 was the exports, which climbed 9.4% compared to 2018. Imports plummeted 18.7%, private investment fell 15.9%, and private consumption fell 6.4%. Public spending contracted, although only by 1.5%.

The S&P Merval shot up over 10% and bonds fell to almost 6%.

The most significant increases were recorded by the shares of YPF (18.43%), Pampa Energía (18.05%) and Cresud (14.5%) in a round where no paper ended with a negative sign. The shares thus coupled with the technical rebound of the ADRs, which advanced to almost 27%. The fixed-income segment continued to be concerned about the debt restructuring process, whose latest signs are leaning towards a more robust offer. In this regard, the Discount under Argentine law fell by 4.7%, Bonar 2020 decreased by 5.8%, and Bonar 2024 lost 3.7%.