The country’s GDP will record a 3% retraction in 2019, only surpassed by Venezuela, which will face a collapse of 25.5%, and Nicaragua, which will have a decrease of just over 5%, according to the latest projection of the Economic Commission for Latin America and the Caribbean (ECLAC). Together with the Bahamas, they will form the group of countries in recession on the continent next year.
Everyone expects changes in political and economic relations between Brazil and Argentina once Alberto Fernández takes power in December. Foreign affairs analyst Marcelo Elizondo believes that Bolsonaro’s threat to lower common external tariff, which would cost Argentina its position as a privileged trading partner, is part of Brazilian conservative president’s program to open the Brazilian market, with the EU free-trade deal being “merely a step toward positioning itself as a continental leader.” That would represent an enormous competitive disadvantage for Argentina as it loses its exclusive, preferential tariff regime with Brazil.
The agreement allows the creation of a market of close to 800 million people. It is hailed by both sides as a landmark in global policy making and a coup for their exporting companies.
Argentine assets have stabilised somewhat in recent weeks, with the country’s central bank now allowed to use IMF resources to intervene in the peso. But many analysts and investors are concerned that the programme is fraying and could collapse if the populist opposition, led by former leftist president Cristina Fernández de Kirchner, wins the presidential election in October. A victory would be devastating for the IMF given its strong backing of Mr Macri.
Argentina will ascend its qualification from “Frontier Market” to “Emerging Market”. Morgan Stanley Capital International (MSCI) a global referent in the financial market, confirmed that Argentina will join to markets such as China, Brazil, Colombia and Russia.The status will benefit in the short term eight Argentinian firms that operate in Wall Street and open the door to fresh funds to a country that is trying to overcome the financial crisis that hit las year.