Buenos Aires Times

Economy in brief: Inflation predictions, economic activity up and Austral subsidides

A look at the economic headlines from the past seven days.

Monday 27 November, 2017
Minister Nicolás Dujovne.
Minister Nicolás Dujovne. Foto:Cedoc.

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DUJOVNE PREDICTS INFLATION WILL TOP 21%, ABOVE EXPECTATIONS

Finance Minister Nicolás Dujovne predicted on Thursday that inflation for the year will likely rise above 21 percent, well above the government’s original target for the year of between 12 and 17 percent. Recently, the Central Bank and the government had predicted a final annual figure of 21 percent, but Dujovne conceded at a press conference that it would likely creep even higher. The minister argued that the rise in consumer prices was slowing, comparing the figure with 2016’s runaway prices, AFP reported. “Inflation is falling. Last year, we had inflation of about 37 percent. It will be much less this year and much lower still in the year ahead,” he declared. Dujovne also said that next year is the last in which the government intends to issue large amounts of foreign debt. 


ECONOMIC ACTIVITY UP 3.8%, TRADE DEFICIT FOR OCTOBER

New statistics from the INDEC national statistics bureau show that economy activity in September grew 3.8 percent compared with the same month last year. INDEC also reported that GDP rose 0.1 percent in September, compared to August. On Thursday, the bureau also posted figures showing that the country registered a trade deficit of US$955 million in October, compared US$54 million in the same month last year. 


NEW SUBSIDIES FOR AUSTRAL BASIN

The Official Gazette announced this week that the Energy Ministry will now offer more subsidies for “unconventional natural gas production” to a further location in a bid to draw in more interest. According to a resolution, the policy – which previously only applied in the Vaca Muerta region – will be extended to the Austral basin in the south of the country. The Energy Ministry said the decision had come “after dialogue” between “unions, companies and provincial governments.” Firms, including state oil company YPF had previously complained that the benefits applied to the site in Neuquén province did not apply elsewhere, with labour and logistical costs prohibitive. 


ARGENTINA JOINS ‘BIOENERGY’ GROUP

Argentina is one of a group of 19 nations that this week said they would “develop collective targets” for the use of “sustainable bioenergy” as part of an effort to slow the effects of climate change. The group, which includes China, Brazil, Britain, France, Italy and Uruguay and represents half of the world’s population, said they would work together to set targets for bioenergy, a reference to the use of plant material to produce energy. 


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