The International Monetary Fund said Argentine officials reaffirmed the nation’s commitment to its $44 billion program with the fund, attempting to shore up confidence after the economy fell deeper into crisis, Bloomberg News reported. Argentine Economy Minister Silvina Batakis “agreed on the importance of decisive program implementation,” IMF Managing Director Kristalina Georgieva tweeted Monday after meeting the new minister, who retweeted the comment.
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South America
Brazil posted a current account deficit of $2.764 billion in March, the lowest shortfall for the period in five years, amid a solid performance in foreign trade, central bank data showed on Monday, Reuters reported. This was the best reading for March since 2017, when the country recorded a current account surplus of $185.5 million. The performance was backed by an improvement in the trade balance, which showed a surplus of $6.109 billion against a $514 million deficit in March 2021.
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Argentina is loosening some currency restrictions for foreign tourists and importers as the peso’s unofficial exchange rates extended a month-long slump, Bloomberg reported. Importers of strategic sectors in the economy will have more access to dollars, the government said in a statement Thursday, as it seeks to avoid shortages of imported goods. Meanwhile, foreign tourists who are not residents in Argentina will be able to exchange as much as $5,000 for pesos at a more lucrative exchange rate than the official one, a measure aimed to shore up the local currency.
Brazilian planemaker Embraer SA on Tuesday announced a partnership with BAE Systems PLC to expand its footprint in the global defense market, including a joint venture to develop a defense variant of an electric aircraft, Reuters reported. Embraer, at the Farnborough Airshow in the U.K., said that it has signed two memorandums of understanding with BAE Systems to go forward with projects involving its C-390 series and the electrical vertical take-off and landing (eVTOL) vehicle to be produced by Eve Holding Inc.
Brazil's economic activity fell for the second month in a row in May, a central bank index showed on Thursday, Reuters reported. The IBC-Br economic activity index, a leading indicator of gross domestic product, fell a seasonally adjusted 0.11% in May from the previous month. The April drop was revised to 0.64% from the previously reported 0.44%. Services activity rose much more than expected in May, while retail sales and industrial output growth came below market estimates.
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Retail sales in Brazil grew more slowly than expected in May, with momentum decreasing amid persistent inflation, Reuters reported. The seasonally adjusted monthly increase of 0.1% in May from April was much less than the median forecast of 1.0% growth in a Reuters poll of economists. Government statistics agency IBGE said month-on-month sales were up in six of the eight categories surveyed in May, with the biggest impact coming from the 3.5% rise seen in pharmaceutical and medical goods. Sales fell 0.2% compared with May last year, IBGE said, versus a 2.6% increase forecast by economists.
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Argentina's new economy minister Silvina Batakis said on Monday she would target cutting the country's high fiscal deficit, pledging "order and balance" in a bid to tame spiraling inflation, tumbling markets and growing pressure on the peso, Reuters reported. Batakis, who took over last week after an abrupt shake-up at the ministry, said Argentina will move toward positive interest rates, maintain plans to cut energy subsidies and stick with goals agreed with the International Monetary Fund (IMF).
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Peru's central bank expects monthly inflation in July to be lower than June's rate of 1.19%, a bank official said on Friday, offering some optimism after annual inflation rates hit a two-decade high in the copper-producing Andean nation, Reuters reported. Adrian Armas, the bank's manager of economic studies, added he expects monthly consumer prices to ease further in August, but noted that the impact of inflation would continue to be felt.
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The International Monetary Fund's board of executive directors met on Friday to discuss the $44 billion Argentine programme for the first time since Silvina Batakis' appointment as economy minister, Reuters reported. In an informal meeting, the fund's staff said Batakis, who was sworn-in on Monday, was in the process of selecting her team, and once ready the first contacts between technical level IMF officials and new Argentine officials will be made.
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