1. Understandably, last month's peso crisis shook confidence in #Argentina and battered President @mauriciomacri's public image, down from 45% to 36% in the May @Poliarquia_ poll.
Show this thread
-
2. At the time, I questioned the conventional wisdom that an
#IMF rescue would further erode Macri's standing, despite Argentines' distaste for the IMF. The ultimate impact will be clearer after next year's election in#Argentina, but for#Cambiemos, the signs are encouraging.Show this thread
3. After the peso stabilized, @Poliarquia_ saw Macri's approval rating quickly improve, up to 40% from 36%. Now, the details of Thursday's $50 billion, three-year #IMF agreement should further boost confidence in #Argentina's embattled government.
-
-
4. The
#IMF and#Argentina's authorities bent over backwards to head off Peronist accusations of heartless austerity. For this year, the government's 2.7% of GDP deficit target (down from a 3.2% target before the capital flight that led to the bailout) is unchanged.Show this thread -
5. True, the subsequent deficit reduction will be "very challenging," according to an Itaú research note: to 1.3% of GDP next year, down from the 2.2% target. But the savings will not come from
#Argentina's social programs, which will face no budget cuts for at least three years.Show this thread -
6. The
#IMF plan,@Lagarde said, is "owned and designed" by#Argentina, and will "protect the most vulnerable in the population" while looking out "for the benefit of all Argentines." http://www.imf.org/en/News/Articles/2018/06/07/pr18216-argentina-imf-reaches-staff-level-agreement-with-argentina …Show this thread -
7. Moreover, the
#IMF bailout was a lullaby to jittery investors. The sum (including an additional $5.6 billion from@WorldBank,@the_IDB and@AgendaCAF) exceeded expectations, and the program, including its fiscal targets, were "very well designed,"@Citi analysts concluded.Show this thread -
8. In addition to the budget cuts, Wall Street cheered promised legislative reforms to
@BancoCentral_AR: greater independence, no more inflationary central bank financing of#Argentina's federal deficit, and a recapitalization to prepare for any future massive portfolio outflows.Show this thread -
9. Some political costs are inevitable. Though
@USTreasury said Macri was "unleashing"#Argentina's "growth potential," the#IMF program carries an "impacto recesivo," as@pagina12 warns: cuts to capital spending, high interest rates and lower real wages. https://home.treasury.gov/news/press-releases/sm0408 …Show this thread -
10. But if the
#IMF deal is truly enough to "regain market confidence," as@jpmorgan analysts project, I foresee political rewards for President@mauriciomacri, especially if economic growth exceeds steeply lowered projections.Show this thread
End of conversation
New conversation -
Loading seems to be taking a while.
Twitter may be over capacity or experiencing a momentary hiccup. Try again or visit Twitter Status for more information.