www.pwc.com/ar
The Macri Administration: First 100 Days
March 2016 Contents
1. Executive summary...... 3 2. 2. Sector-specific actions and perspectives...... 4 2.1 Agriculture...... 4 2.2 Infraestructure...... 4 2.3 Energy...... 5 2.4 Mining...... 5 2.5 Telecommunications...... 5 3. Foreign Policy...... 6 4. Domestic Policy...... 7 5. Normalizing economic imbalances...... 8 5.1 Exchange rate...... 8 5.2 Foreign currency reserves and inflation...... 9 5.3 Return to capital markets...... 10 5.4 Fiscal Policy...... 10 6. What we expect at PwC...... 11
Contacts
If you wish to obtain information and/or learn how we can help, please contact us
Santiago Mignone Jorge C. Bacher Ignacio Aquino Country Senior Partner Partner | Deals Partner | Deals [email protected] [email protected] [email protected] Tel.: +54 11 4850-4563 Tel.: +54 11 4850-6814 Tel.: +54 11 4850-6816
Federico Hourbeigt Eric Krasnow Manager | Corporate Finance Analyst | Corporate Finance [email protected] [email protected] Tel.: +54 11 4850-4672 Tel.: +54 11 4850-4600
2 The Macri Administration: First 100 Days March 2016 1. Executive summary
President Mauricio Macri took office last December with stated plans to normalize economic imbalances, strengthen domestic institutions and tackle poverty, corruption and drug trafficking. He offered a pragmatic and market-oriented vision that stressed the need for collective action to ensure the long-term success of the country. One hundred days later, his administration has taken significant steps towards advancing this agenda and addressing the country’s most urgent challenges through a series of major economic, political and regulatory policy measures. President Macri heads to the Presidential Palace after being sworn into office | December 10th, 2015
Key measures of the Macri administration’s first 100 days
¾¾ A historic USD 4.65 billion agreement to settle claims from a group of holdout investors that will allow Argentina to re-enter international capital markets after 15 years of being locked out.
¾¾ The liberation of foreign exchange controls, placing the Argentine peso (ARS) under a managed-float regime.
¾¾ The agreement of the Central Bank of Argentina to borrow USD 5 billion from international banks to bolster foreign reserves.
¾¾ The elimination of export tariffs on agriculture products (wheat, corn, sunflower, meat and fish), minerals (metallic and non-metallic) and certain industrial goods; as well as the reduction of export tariffs on soy and its derivatives from 35% to 30%, with a plan to gradually phase out tariffs by the year 2022.
¾¾ The elimination of income taxes on all workers’ income below ARS 30k (c. USD 2k) per month.
¾¾ The reduction of subsidies on electricity, with the exception of those that impact low-income families.
¾¾ The normalization of public statistics through an overhaul of the National Institute of Statistics and Census.
¾¾ A major shift in international relations, with an emphasis on strengthening ties to the U.S., U.K. and E.U.
March 2016 The Macri Administration: First 100 Days 3 2. Sector-specific actions and perspectives
2.1 Agriculture Over the past 100 days, a top priority for the new administration has been improving the ile | Agroi profitability profile and investment incentives in the domestic agriculture sector. Within the rya ndu Bu st o ry first week of the President’s term, the administration eliminated export tariffs on wheat, rd M a corn, sunflower, meat and fish and reduced export tariffs on soy and its derivatives from c in i i R s 35 to 30%, with a plan to gradually phase out tariffs by 2022. According to sector experts, . t r e r D these measures are expected to boost annual production from the current 100 million tons of grain and soybeans to 180 million tons by 2025. Agricultural product exporters, whose dollar-denominated earnings increased in value after the government’s December decision to lift foreign-exchange controls and allow the Argentine peso to float freely, have already proven more willing to liquidate existing stocks and increase crop production; during the last three weeks of 2015, farmers sold USD 2 billion of grains and oilseeds, over 4.5 times the amount sold in November.
Foreign sales of oilseeds and grains in USD, daily averages per week in 2015
180
160
140
120 o n i
l 100 l i