Category: Macroeconomy/Finance

Information regarding Argentina’s productive sector and the country’s macroeconomy.

The economy recovered 1.9% in June

The General Activity Index (GAI) showed that the economy recovered by 1.9% in June compared to May. In the year-on-year comparison, activity showed a 10.6% drop, below April (20%) and May (15.7%) collapses. The most critical loss was in the construction sector, which collapsed by 30.6%; and trade which contracted by 15.4%.

Reserves: fall in July, BCRA sold more than $360 million

Under the pretext of avoiding a balance of payments crisis, everything points to the fact that the exchange rate trap will have a long life. There is concern about the dripping reserves that the BCRA is suffering. At the end of almost three weeks in July, the BCRA recorded net sales with the private sector of $362 million. Net reserves estimated at $10 billion, half of which is gold and SDRs.

Consumption fell by 3.2% in June

The massive consumption had during the month of June, a fall of 3.2% compared to the same month of the previous year. According to the product categories, the main consumption drops in June were in non-alcoholic beverages (-13.4%); sweets, (-9.6%); hygiene and cosmetics (-5%); spirits (-3.8%) and perishable and frozen (3.6%).

SMEs: 80% increase in capital market financing

According to a recent report by the National Securities Commission (CNV), financing for SMEs in the first half of the year increased 80% year-on-year. The deferred payment cheque remained the main instrument, reaching more than 90% of the amount obtained by the companies. 48% of the companies financed between April and June in the capital market were SMEs.

Private deposits rose $270 mn

For the first time in the year, private dollar deposits registered a monthly growth during July. As of July 20, official data show that the stock of these private placements has grown by $270 million, reaching a total of $17.06 billion, after falling to levels of $16.77 billion.

The Central Bank renewed the swap with China for $18.2 billion

The Central Bank’s board of directors was able to renew the currency swap with the Central Bank of China for about 130 billion yuan, equivalent to $18.2 billion, which was due to expire on July 27. This amount represents 42% of the BCRA’s gross reserves, which stand at $43.35 billion. The Central Bank’s board of directors is thus seeking to strengthen the reserves.

Three million workers struggled during the quarantine

The coronavirus aggravated the crisis unleashed in April 2018, particularly affecting the lower-income segments. About three million workers, informal and independent, had severe difficulties in carrying out their activities during the isolation. Construction, hotels, restaurants, entertainment services and domestic service were the most affected. This deterioration is being mitigated by the Emergency Family Income (IFE), covering on average about 40% of the labour income of this segment.

ADRs rose to 15.5% in the week

Argentine shares have climbed to over 15% in the last five days, an escalation that market specialists see as a preview of a possible agreement on sovereign debt restructuring. Among the week’s most notable increases were those of Loma Negra (+15.5%), Transportadora de Gas del Sur (+12%) and Grupo Financiero Galicia (+12%).