Ill-Fated Policy Raises Default Risks

Argentina's government is reportedly working on an economic plan that will tap US$24bn in nationalised pension assets to spur construction and homes sales. While the details are unclear at this stage, we believe that the pension funds will be used to subsidise both construction projects and mortgage lending. This is a clear sign that President Cristina Fernández's administration is growing anxious about a fall in economic activity and a rise in unemployment with June's mid-term elections just around the corner. We have two points to make on the government's

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