Ashmore latest...2 Mar 2025 16:05
..."Argentina: The government recorded a primary surplus of 0.3% of GDP in January, maintaining last year’s level despite a 2.1% yoy decline in revenues, largely due to a sharp drop in export tax collection. On the expenditure side, spending rose 13.5% yoy, though from a low base.
Consensus suggests the government will continue achieving a fiscal surplus, supported by a strengthening economy. Additionally, authorities introduced Deregulation 2.0, a decree aimed at eliminating unnecessary laws and streamlining regulations. Public offices within the national administration have 30 days to identify laws for potential repeal, with approximately 4,600 active laws and 4,200 decrees currently in place.
Last week, the Argentinian Senate approved in a 43-20 score the suspension of the obligatory primary elections (PASO) before the mid-term elections in October. It highlights the ability of Milei to approve reforms despite the crypto scandal noise and is positive intuitionally as it eliminates an ambiguous universal ballot, saving costs and postponing the pre-election political paralysis.
In other news, the Central Bank changed the regulation on foreign currency lending, allowing banks to borrow externally (Eurobond or interbank) to lend Dollars to locals. The current yield on the Eurobond of large banks below 7% suggest the offshore market is well open for activity, which is likely to increase the availability of dollars, allowing the central bank to accumulate foreign exchange reserves...."
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