Argentina’s shrinking economy would bottom out in the first three months of next year and start to recover in the second quarter, an IMF official said on Saturday.
The fund last month upped the size of its standby financing deal with Argentina to US$56.3 billion after negotiating tougher fiscal measures that have already dented the popularity of Argentine President Mauricio Macri ahead of his re-election bid next year.
“The bottom of the recession, the floor, will be hit the first quarter of 2019, and in the second quarter we are going to see a recuperation,” IMF mission chief for Argentina Roberto Cardarelli told reporters at a news briefing in Buenos Aires.
The revamped IMF agreement calls on the Macri government to deepen spending cuts and raise taxes to bring the primary fiscal deficit, projected at 2.7 percent of GDP this year, to zero next year.
Cutting the deficit during a presidential election year is almost unheard of in Argentina, where wide swaths of the population have come to rely on welfare programs and subsidies that helped the country recover from a 2002 economic crisis that tossed millions of middle-class Argentines into poverty.
Government spending reductions are being made all the more painful by a recession that began earlier this year after a drought wrecked the country’s main cash crop, soybeans.
The fund expects Latin America’s third-biggest economy to contract by 2.8 percent this year and by 1.7 percent next year.
“Average growth for the year will be negative, particularly because the end of this year will be negative. There will be a carry-over effect,” Cardarelli said.
Analysts forecast this year’s inflation at about 47.5 percent and the peso has lost about half its value this year.
“Current fiscal and monetary policy is a policy of stabilization. Macroeconomic stabilization has a cost. We believe this cost will be paid over the short term and that the recession will not last long,” Cardarelli said. “It should last two or three quarters and in the second quarter of next year we should see a recuperation of economic activity.”
The run on the peso was sparked in April by doubts about the central bank’s ability to roll over its short-term debt.
Investors dumped Argentine paper in favor of safe-haven US dollar assets bolstered by the US Federal Reserve, which has hiked interest rates three times this year and is widely expected to do so again next month.
KEEPING UP: The acquisition of a cleanroom in Taiwan would enable Micron to increase production in a market where demand continues to outpace supply, a Micron official said Micron Technology Inc has signed a letter of intent to buy a fabrication site in Taiwan from Powerchip Semiconductor Manufacturing Corp (力積電) for US$1.8 billion to expand its production of memory chips. Micron would take control of the P5 site in Miaoli County’s Tongluo Township (銅鑼) and plans to ramp up DRAM production in phases after the transaction closes in the second quarter, the company said in a statement on Saturday. The acquisition includes an existing 12 inch fab cleanroom of 27,871m2 and would further position Micron to address growing global demand for memory solutions, the company said. Micron expects the transaction to
Vincent Wei led fellow Singaporean farmers around an empty Malaysian plot, laying out plans for a greenhouse and rows of leafy vegetables. What he pitched was not just space for crops, but a lifeline for growers struggling to make ends meet in a city-state with high prices and little vacant land. The future agriculture hub is part of a joint special economic zone launched last year by the two neighbors, expected to cost US$123 million and produce 10,000 tonnes of fresh produce annually. It is attracting Singaporean farmers with promises of cheaper land, labor and energy just over the border.
US actor Matthew McConaughey has filed recordings of his image and voice with US patent authorities to protect them from unauthorized usage by artificial intelligence (AI) platforms, a representative said earlier this week. Several video clips and audio recordings were registered by the commercial arm of the Just Keep Livin’ Foundation, a non-profit created by the Oscar-winning actor and his wife, Camila, according to the US Patent and Trademark Office database. Many artists are increasingly concerned about the uncontrolled use of their image via generative AI since the rollout of ChatGPT and other AI-powered tools. Several US states have adopted
A proposed billionaires’ tax in California has ignited a political uproar in Silicon Valley, with tech titans threatening to leave the state while California Governor Gavin Newsom of the Democratic Party maneuvers to defeat a levy that he fears would lead to an exodus of wealth. A technology mecca, California has more billionaires than any other US state — a few hundred, by some estimates. About half its personal income tax revenue, a financial backbone in the nearly US$350 billion budget, comes from the top 1 percent of earners. A large healthcare union is attempting to place a proposal before
RSS