Geopolitical & Socioeconomic

The Economic Outlook for Argentina at the End of the Kirchner Era

About the event

Canning House is delighted to host a round table event in partnership with The Centre for the Study of Financial Innovation (CSFI)

The meeting will coincide with the publication of a Canning House Paper assessing scenarios for Argentina in its election year.

Opening remarks will be given by our guest speakers:

  • Professor Colin M. Lewis, author and Emeritus Professor of Latin American Economic History, London School of Economics
  • Dr Jill Hedges, author of Argentina: A Modern History, Deputy Director of Analysis, Oxford Analytica

This will be followed by an open discussion chaired by Andrew Hilton, Director of CSFI and a former World Bank Economist.

At the event we will discuss the impacts of the sovereign debt default that took place in July 2014 both domestically and internationally, and assess how the government’s defiant stance against the rulings has affected its support domestically.

Recession took hold in first quarter of 2014 and has continued. Devaluation pressure persists despite adjustments. Wage demands have grown and inflation has risen. We will assess what risks this may cause to political stability in the run

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up to October 2015 presidential poll.

The race for the October 2015 elections has already started. We will profile the main contenders and ask if the electorate might return a President with a more liberal, business friendly political agenda. As Cristina Kirchner stands down, we will also assess what comes next for kirchnerismo.

The economic outlook in 2015

Annual GDP growth, which was running at 9.2% in 2010, fell to a low of 1.9% in 2012 and bounced back halfway, to 4.9%, in 2013. Forecasts for 2014 were pessimistic. The UN Economic Commission for Latin America and the Caribbean (Cepal) expects 0.2%, the IMF 1% and the World Bank 1.5%, to take only three forecasts.

Will the Central Bank (BCRA) allow the peso to depreciate into 2015 and weaken in real terms? What impact will this have if there is no macroeconomic policy tightening? Can the peso’s fall be controlled is there a risk of an uncontrolled devaluation? The executive has sent to Congress the 2015 budget bill, which projects a significant fiscal retrenchment, but how realistic is the budget when some say it is based on unrealistic economic assumptions?

With thin reserves fallen from US$52bn in 2010 to US$27.9bn today and external financing options remaining closed to Argentina, what alternative does the government have other than reigning in expenditure?  Without access to international capital markets what local finance will the government rely on?

And finally, is there some chance that the government will move to agree a deal with holdouts at the start of 2015?

The government's latest efforts to swap defaulted exchange bonds for bonds issued in a local jurisdiction (evading the US court system) suggest that it has little intention of securing a deal with holdouts. Will the problem be left to the administration that takes office at the end of 2015?

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This event is open to Canning House Corporate members. To RSVP please book below or email: [email protected] you can also call 020 7811 5600 to RSVP.

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