Informe Mensual Económico Financiero N° 334 – Diciembre de 2017
The US economy, which grows at a rate of 2.5% per year, concentrates international
attention because of the following: i) the impact of the reduction of corporate income
tax; ii) the rise, estimated at one percentage point for 2018, of the reference rate of
the Federal Reserve.
Both combined effects can generate a reflux of funds to the United States, a moderate
drop in the price of bonds and a mild revaluation of the dollar. This, notwithstanding
the existence of a structural excess of savings due to demographic issues, the
relatively low investment rate and the effects on the liquidity of the disarmament of
the monetary facilitation programs promoted at the time by the Federal Reserve and
the European Central Bank.
The Bloomberg Index of commodity prices shows a rise of 6% in the last twelve
months, in a context of relative calm. The protectionist turn of the United States under
the Trump administration does not prevent a slight acceleration in the growth of
international trade, which would do so around 4%–5% in 2018, which is a key data
for the construction of the Argentinean scenario of 2018. In any case, it is necessary
to monitor the conditions of the renegotiation of the NAFTA conditions, whose
negative impact for Mexico is around 1.5% of the GDP.
After the government electoral victory in October, the risk Premium for Argentina was
set at 360 basis points, versus 493 in December 2016 and 410 in June 2017; although
it is a significant reduction, it is well above Brazil (245) or Uruguay. This indicates
there is a long way to go down.
The concern of investors based on the government’s capacity in articulating the pace
that the policy imposes on the correction in 2018 of the fiscal deficits (6% of GDP)
and of the Current Account of the Balance of Payments (4.9% of GDP), with the
possibility of financing, in a context with growing debt and with an inflation rate that
resists to fall of 1.5%monthly. This translates into a low participation of Foreign Direct
Capitalizing on the electoral result, the Executive Branch sent to Parliament a set of
projects within the framework of a fiscal commitment between Nation and Provinces,
which includes, among other issues: i) the resolution of cross-debts between both
levels of government; ii) the elimination of the Great Buenos Aires Fund; iii) the
change of financing of the retirement system; iv) changes in the pension system
modifying the adjustment index –with an eventual future saving– the instance of the
possibility that the worker chooses not to retire at 65 years (Light formula of the
postponement by law of the age of retirement).