Information regarding Argentina’s productive sector and the country’s macroeconomy.
Exports from the soybean, corn, wheat, sunflower and barley agro-industrial complexes reached a record in the first half of the year. With 52.5 million tons, it is 80% of the volume of Argentina’s total exports and 50% of the value that reached $13.63 billion. The agro-industrial sector consolidated as the main generator of genuine currency in the country.
The National Ministry of Agriculture, Livestock and Fisheries has launched a call for investment proposals aimed at incorporating technologies for the generation of renewable energy applicable to agricultural exploitation and industrialization. Non-reimbursable contributions can be up to 60% with a maximum refund amount of US$ 30,000 per initiative. The closing date is August 28th. Projects must submit by sending the completed form and its attachments to diprose@magyp.gob.ar with a copy to serviciosfinancieros.diprose@magyp.gob.ar.
Flour exports, the main export product of the soybean complex, plummeted by 10% and shipments of raw soybeans increased by 50%. The elimination of the tariff differential ended up affecting the milling margin, and as a consequence, Argentina started exporting more beans than usual. At this moment, the use of the installed capacity of the agricultural industry is below 60%.
Gross domestic investment fell 10.5% in June in the year-on-year comparison and stood at 19.7% of gross domestic product. June investment was of $5.35 billion and accumulated in the first semester, a drop of 16.5% concerning the period of 2019.
The Ministry of Economy on Wednesday obtained about 110 million pesos ($1.52 bn), 22% more than it sought to place in the bidding of Ledes, Boncer and a fixed-rate bond with maturity between 2020 and 2022.
Gold, an essential component of Argentina’s reserves, rose 1.02% to $1,964.50 an ounce because of fears about the pandemic. In 2020 it has accumulated gains of 30% in dollars. The other components that make up the local reserves are the euro, the yen and the pound sterling.
The Ministry of Economy will seek today to place 90 billion pesos ($1.25 bn) in a tender for Ledes, Boncer and a fixed rate bond at 22%, to refinance about 86.5 billion pesos ($1.2 bn) that expire next Friday.
In the first half of 2020, Argentina recorded a trade surplus of $8.097 billion, which meant a growth of 44.8% compared to the same period but in 2019. Exports fell by 11% and imports collapsed by 23.3%, affected by the fall in economic activity. The decline in imports explained by a lower purchase of capital goods such as machines, electrical appliances, nuclear reactors, or mechanical devices, land vehicles and fuels. On the side of exports, the most significant fall verified in the sales of land vehicles.
78.6 per cent of tax collection at the three levels – nation, province and municipalities – is for the production and transaction of goods and services, while the remaining 21.4 per cent comes from taxes linked to income and wealth. The public sector is one of the largest payers of the levies contained in goods and services. Indirectly, the government is affected by the consequences of the system’s regressivity. It is because, by modifying the purchasing power of the lower-income strata, the government has to implement social plans and compensatory subsidies (transfers).
The risk rating agency Standard & Poor’s (S&P) announced yesterday the downgrading of two Argentine bonds in foreign currency to “D”, from “CC”, and left them in default because the government did not cover the maturities of these securities that are part of the debt renegotiation.
