Argentina: favourable scenario

摘要

The Argentine economy is showing signs of strong growth in 2006 which lead to forecast an annual gross domestic product (GDP) expansion rate over 8% for the forth year in a row. The economy's capital stock is being re-established thanks to a fixed investment which amounts to over 20% of the yearly GDP. The current situation described is based upon economic measures that have accomplished twin surpluses (fiscal and foreign trade) given the undervalued currency and the strong tax burden that hangs overeconomic activity. Actually, the Central Bank has participated in the currency exchange market to keep the Argentine peso at around 3.10 AR dollar/U dollar S during the first quarter of 2006. Concerning fiscal policy, no action has been taken towards the reduction of the current tax burden. Anyhow, some indicators are signalling a weakening of these twin surpluses.