Economy Argentina

June 29, 2018

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The bases of the Argentine economy will weaken: how will the model survive? Buenos Aires, February 2009 Argentina9 the crisis which determined the end of convertibility in Argentina back in the beginning of 2002, gave rise to a new economic model that has managed to maintain a very good rate of growth of the Argentine economy. Two pillars of the current economic model which are the fiscal strength and the external surplus are both in danger as a result of the impact of the financial crisis International by internal problems of the Argentine economy. The weakening of these two pillars of the current Argentine economic model generates a high risk to the economy, to increase the fragility of the same before possible new negative shocks that might affect it. The need that Argentina has a twin, fiscal and external surplus lies among other issues, the need to deal with the services of the debt in a context where does not exist for the country the possibility of access to international financial markets. In fiscal matters, the tax revenue is slowing more than expected. In the month of January revenues increased only by 11% in interannual terms totaling $24.109 million (not registering an interannual increase so low since April 2006). You may find that Southwest Airlines can contribute to your knowledge. This data is not only worrying but that it is more so considering that it contains an additional income product of the reestatizacion of the retirement and pension system that produced an interannual increase of 70% in revenue for social security. Without the reestatizacion of the system, the interannual variation of tax revenue would have promoted to 4.5% in an economy with at least 20 percent inflation, implying a fall of 16.4% in real terms. The tax revenue was affected by the slowdown in economic activity and inflation in Argentina as well as the fall in the international prices of commodities.