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Informe Mensual Económico Financiero N° 336 – Febrero de 2018



goods with greater elasticity are affected in their sales volume, without intervention

the interest rate.

This is the framework of wage bargaining. The real wage for February 2018 will

probably be higher than twelve months ago, but that does not imply the absence of

tensions. The decision to avoid the trigger clause contributes to reduce inflationary

inertia. But the results of the negotiations will be relevant for the course of the

inflation rate. The floor of the wage increases will be around 15% and the ceiling el


The fiscal closure of 2017 showed a financial deficit of 6.9% of GDP, beyond the

fact that the primary deficit (3.9%) implied exceeding the official target (4.2%). The

interest burden is felt increasingly and is a vulnerability to the rise in the yield of

Treasury bonds of US in progress. It helped to meet the goal, that in December the

primary spending grew only 5.9% year-on-year (spending on subsidies fell 26.6%,

transfers to the provinces 13.6% and capital expenditure 24.8%).

The evolution of deposits in 2017 was consistent with the inflation rate. Three

important factors are: i) the high growth of the circulating holdings in the public, well

above the inflation rate (in 2018 it will hardly happen again); ii) the low growth of

fixed-term deposits (cannibalized by the Lebac); iii) the growth of credit to the public

sector, that doubled that of system deposits.

The commercial balance for 2017 (exports minus imports) registered an important

deficit of -8,471 million dollars, compared to +1,969 million in 2016. This is due to

the fact that exports increased annually at almost 0.9% and imports did so at 19.7%.

The crucial point is that imports accelerate as the level of activity grows. Therefore,

more and more financing of the Current Account of the Balance of Payments is


The regional disaggregation of the aforementioned trade deficit shows two countries

at the front: Brazil and China, with -8,672 million dollars and -7,736 million, followed

by the NAFTA and the EU (-3,877 million and 2,819 million, each). In these cases

Capital Goods, Intermediate Goods and Spare Parts and accessories for Capital

Goods predominate.

El IAEF agradece la colaboración de la Sra. Marta Álvarez – Executive English en la traducción de

esta Síntesis Ejecutiva.