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Argentina: Breaking the Mould Drought-induced crop failures caused the Argentine economy to shrink by close to 4% in the second quarter of this year, compared to both the previous three-month period and Q2 2017. According to national statistics agency Indec, 2018 should see the country’s GDP contract by 2.4%. Growth was held back by disappointing yields of the soybean and corn crops after the central part of Argentina, the fertile pampa, was hit by a prolonged dry spell earlier in the year. The weather conspired with already jittery markets to create an almost perfect fiscal storm for the administration of president Mauricio Macri. Markets castigated the government for not moving fast enough to curb its spending and introduce the meaningful and broad reforms needed to put the country on a more sustainable footing. A sudden sell-of caused the peso to drop through the bottom, requiring Buenos Aires to put in an urgent call for help to the previously much-maligned International Monetary Fund (IMF). The fund took markets by surprise as it cobbled together a $50bn rescue package in record time and signalled its full support for the embattled Macri Administration.
Argentina: Buenos Aires
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