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[email protected] Heidi Lough www.cefeidas.com
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[email protected] Ciudad Autónoma de Buenos Aires (C1425APO) CLIMATEREPORT República Argentina Political Climate Report - ARGENTINA March 9, 2016 POLITICAL IN THIS ISSUE In February, Mauricio Macri’s new government took further steps to address two of Argentina’s main short-term economic Page 2 challenges: reducing federal spending, and resolving the protracted holdouts dispute to regain access to international Argentina reaches preliminary capital markets. Correcting these imbalances will be crucial to agreement with holdout creditors avoid further deterioration of macroeconomic conditions. Peso depreciates further despite Curbing inflation represents a further key challenge, although Central Bank intervention the government has had little success on this front so far. The international community has generally come out in strong Page 3 favor of the Macri administration’s policy agenda. Amid rising Macri courts opposition elements expectations, however, significant challenges remain. Page 4 Edging towards economic normalization Provisional agreement reached over changes to federal co-participation After several weeks of speculation, the new administration system publicly stated its decision to adopt a ‘gradualist’ approach to Government negotiates salary reducing Argentina’s fiscal deficit. As discussed in our previous increases with labor unions PCR, measures to curb federal spending have so far included Page 5 the reduction of subsidies on public utilities (mainly electricity) and the suspension of contracts for around 80,000 public Argentina moves closer to US, sector workers.