Macroeconomic Forecast ArgentinaAugust 2012 | Macroeconomic Forecasts
The Argentine central bank reported that international reserves fell to US$46.35bn in June, down from US$46.98bn in May, a 10.3% y-o-y contraction. We expect the government's use of reserves to pay down debt and increasing capital flight caused by President Cristina Fernández de Kirchner's interventionist economic policies to continue this trend, forecasting reserves to fall to US$38.00bn by year-end. As Argentina has over six months of import cover, a balance of payments crisis does not appear to be imminent. That said, we believe persistent expansionary monetary and fiscal policy will increase risks for the country's external account position.
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