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ECONOMY | 07-10-2017 21:06

Economy in brief: inflation, soy beans, energy and green shoots

Four items about the Argentine economy.

2018 INFLATION ESTIMATE RISES. Experts consulted over the likely rate of inflation in 2018 have raised their expectations to 15.8 percent, up 0.1 percentage points from last month.The Central Bank’s monthly poll of economists showed little change to September’s consultation, yet the target remains above the government’s target of between eight and 12 percent. The group of 54 analysts said they expect inflation in 2017 to reach 22 percent, unchanged from the previous month, with growth expected to come in at 2.8 percent.

ANDEAN ENERGY SWAP IN THE WORKS. Argentina and Chile are nearing an energy swap deal that will lead to the construction of five new “electricity interconnection points” over the next few years, reuters reported this week. Chilean Energy Minister andres rebolledo explained on Thursday the deal would allow both countries to send natural gas or electricity across the border; last year, Chile exported 100 gigawatt-hours of electricity and 361 cubic metres of gas to argentina worth nearly $100 million. The countries have already commissioned studies on the economic feasibility and efficiency of the project.

GREEN SHOOTS FOR AUTO INDUSTRY. Argentina’s auto-industry grew more than 10 percent in September on the back of resurgent demand from Brazil, helping it buck the trend and break into positive inter-annual growth for the first time in 2017. a 20-percent jump in domestic demand in Brazil helped argentine auto-exports surge 19 percent in price and 11 percent  in volume; the gap is indicative of argentina’s high production costs and limited competitiveness. The 11 auto-makers with factories in the country manage to sell 20,561 units abroad in September.

EXTREME WEATHER AFFECTS SOY BEAN CROP Intense flooding across argentina’s agriculturally-rich regions have led to the lowest soybean crop estimates in a decade, according to the Buenos aires Cereal Exchange (BC). They expect a total of 18.1 million acres, the second consecutive contraction and the lowest since the 2008/09 crop. Widespread flooding in large swaths of the Buenos aires Province, in the East of la Pampa, in Southern Cordoba and Santa fe have reduced potential cropland.

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