Argentina’s Outlook: Political Issues Hurt a Favorable Economic Environment

From the economic point of view, 2010 should be a good year for Argentina’s economy. The agricultural sector will show a strong recovery, the industrial production is also growing, reflecting the performance of its neighbor, the Brazilian economy. Tax revenues will climb faster and debt services are lower than the last year. Nevertheless, we expect a year of continuous political conflicts that may generate uncertainty, some volatility in financial markets and may hurt the favorable economic environment. The conflict between the president of the Central Bank and the Federal Government is the first one but may not be the last one.