At an online forum, Moody’s official Juan Fuentes announced the firm’s projection of a 3% contraction in Argentina’s economy this year.
He also mentioned that consumer prices might rise above 300%. This high inflation is partly due to currency value falling after Javier Milei won the presidential race.
Milei’s policies are making prices go up, Fuentes explained. He believes this will hurt economic growth.
Despite these challenges, there are hopeful signs. Argentina’s farming sector might recover from last year’s drought.
This could lead to strong economic growth at the end of this year and into the next. This outlook depends on political and social stability.
Fuentes also talked about the government’s plan to reduce spending by 3% of GDP.
This plan includes cutting jobs in the public sector and reducing overall spending, even on public projects.
These cuts are essential for reducing the country’s deficit. Achieving a budget surplus is critical for Argentina to borrow from international markets again.
Fuentes does not see the country using the US dollar as its currency anytime soon. However, he expects the government to make it easier to use dollars in the future.
This would be a step towards partial use of the US dollar.
Alfredo Coutiño of Moody’s spoke about Mexico’s elections on October 1st. It’s hard to say what will happen.
But two outcomes seem likely. If the current party wins, it will likely increase government involvement and social spending.
An opposition win would mean more free-market policies and private-sector involvement. Coutiño warns there might be claims of election fraud and protests.
The current party’s candidate is Claudia Sheinbaum from Morena, the same as President Andrés Manuel López Obrador.
She was also Mexico City’s mayor. Her opponent is Xóchitl Gálvez. She represents a coalition of PAN, PRI, and PRD parties.
More: Argentina news in English, every day from The Rio Times.
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