Default on its way.....?

Rich One

Default on it's way....?

60 % of the Argentine businessmen interviewed during the Davos Meeting this week. expressed that they have no intentions to reinvest in their businesses during 2019 ...! If local businessmen that Know the business climate don't plan to invest until after the elections. No one could expect that naive foreign investors, will Start a business in Argentina....:rolleyes:

On the other hand Clarin mentioned that US$27 billion left the system during 2019 . local businesses send their dollars Out...o_O


In this country,(as in many others), there is an "snake in the grass", which bites each and every administracion that takes power.
That is the fiscal deficit, about 7 pct of the federal budget. But it is enough to undermine every gov. program to avoid it.
Some politicians try to solve the problem by stimulating consumption (Cristina, peronists, etc).
Others try to use financial tricks, loans, devaluacions,etc,(Macri, radicals).
The fact is that no one tackles the root of the problem, it being an unpopular act.
So the story goes on.


The liberal economists are saying the default will happen in either 2019 or 2020 as there are big debt payments due then. The IMF funds should cover 2019, but it depends on the elections as commented above and the will to continue with a zero budget deficit policy post November. If the recession lasts beyond June 2019 it will be increasingly harder to meet interest payments as the tax base gets smaller and smaller.
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