Argentina Project

2/ @Lagarde has reiterated her support of the @mauriciomacri administration’s handling of #gradualismo while overseeing a “systemic transformation of its economy.” Also, much of the current crisis is due to “challenging circumstances”pic.twitter.com/HgA7qiSDiT

3/ the #IMF notes that the new infamous December press conference @marquitospena led the announcement that the gvt was changing the inflation targets, putting into question the @BancoCentral_AR autonomy. And this image of executive overreach precipitated the loss of confidence.pic.twitter.com/baEzXm3gZI

4/ they also point to the imposition of the capital gains tax on financial instruments on April 26th to be correlated with the run on the peso, as the carry trade that maintained demand for the currency fell off.pic.twitter.com/9DMy7xXuLw

5/ the #IMF argues that the success of the program depends on the ability of the gvt to impose “upfront implementation” of fiscal adjustment. That is, the gvt will have to impose much of the cuts immediately and in ‘19, an election year. Goal: primary balance in ‘20.pic.twitter.com/BaBmPzCgHB

6/ part of the fiscal austerity will be shouldered by net contributors to the tax system, as planned tax cuts will have to be postponed.pic.twitter.com/SpfpaLHg0t

7/ a major area of adjustment will be in public sector, where there will be a hiring freeze a large decline in real salaries for public sector employees. Recently #Macri decreed a freeze, but this will set up the gvt for major conflict with combative public sector unions.pic.twitter.com/zfmVHCSM3s

8/ as per usual, the gvt capital expenditures will see a major decline in a period of austerity. The hope is that the effect of lower public spending will be compensated for by increase in private investment in infrastructure.pic.twitter.com/LEGmd0q05s