By Clayton Browne

There is a growing consensus among international economists that Argentina’s decade-long economic boom is rapidly becoming an out-of-control inflationary spiral. Real inflation has grown at 20+% annually for over three years, and the Argentine government is clearly in denial or even cover-up mode regarding the situation.

Many businesses in Argentina are already struggling from the double-digit inflation, especially industries like outsourcing that rely largely on income from outside of Argentina, and things are only going to get worse as most sources expect Argentina’s inflation rate to approach 25% in 2012.

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By Filipe Pacheco

For Grupo Assa,  the old traditional (and stereotyped) rivalry between Brazil and Argentina is strictly kept to the soccer field. Grupo Assa, specializing in IT consulting and outsourcing, was created in 1992 in Argentina, but Brazil is the country that is now responsible for more than half of the company’s revenue.  The group recently announced plans for a second delivery center in Sao Paulo, scheduled to open in the second half of of this year.

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Source: MercoPress

Argentina must solve the controversy over the measurement of inflation which has significant economic and political costs, said Eugenio Diaz-Bonilla the Inter American Development Bank, IADB, director for Argentina and Haiti.

“We need to solve the conflict surrounding inflation stats”, said Diaz-Bonilla during discussions at the Inter American Dialogue in Washington. “The controversy has many political, economic and institutional costs” added the economist who revealed he has addressed the issue with Argentine officials.

According to Argentina’s discredited National Stats and Census Institute, Indec, inflation in 2011 was 9.5%, but private consultants put the figure at 22%, and this is the percentage on which for example the unions negotiate salaries. Likewise some provinces ruled by the opposition also have similar two-digit measurements.

Last week The Economist said it would no longer take into account Indec stats and clearly called on the government to ‘stop manipulating percentages” because they are not to …

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Source: MercoPress

Argentina limited the use of cash in the country’s financial markets as President Cristina Fernandez tightens oversight of currency transactions to help contain capital flight and prepare for what is anticipated a ‘difficult’ year for the Treasury and the Argentine economy.

The government will restrict daily cash transactions to 1.000 Pesos (231 US dollars) per person, down from 10.000 Pesos, according to a statement in the Official Gazette. The measure affects activity in the stock and bond markets, investment funds and in the futures markets. Operations above the limit will have to be done through Argentine bank accounts that are authorized by the central bank.

“They are forcing a higher level of formality in the economy, as cash transactions allow more irregularities,” said Felipe Hernandez, an analyst at RBS Securities Inc. in Stamford, Connecticut. “This is in line with other measures to prevent money laundering, for which the government …

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Source: MercoPress

President Cristina Fernandez has more power than Juan Domingo Peron “ever had” and Peronism in Argentina is guarantee of governance, according to Carlos Corach a former Interior minister from the former President Carlos Menem administration and a respected solicitor and political analyst.

“Cristina Fernandez is probably the president which has enjoyed more power in the history of Argentina. I’d say even more, she has more power than what Peron had. Peron had to deal and negotiate with very strong corporations, and economic and political sectors”, said the former minister.

Corach added that Peron (the Army Colonel who was president from 1946/1952, re-elected in 1952 but ousted by a military coup in 1955, to return triumphantly in 1973) had to learn to live with the Armed Forces, a very powerful Catholic Church and an opposition that also had strong and charismatic leaders”.

 

“Currently the majority of those players don’t hold such …

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Source: Merco Press

Brazil’s government is ready to respond to Argentine trade restrictions introduced this week but will evaluate the impact of the measures before making any retaliatory moves, trade officials said Friday.

Argentina this week said that beginning in February it will require all importers to file an online affidavit with its tax agency, Afip, before importing goods, providing the Argentine government an instrument to delay imports or determine what goods enter the country.

In response to the measure, Brazil’s Trade ministry issued a statement expressing worry over the effects of the move on trade with its largest regional partner.

“The trade ministry received notice of the measure with concern and established contact with the Argentine government to better evaluate the possible impact on Brazilian exporters,” the ministry said in a statement.

According to a trade ministry official, discussion of the new Argentine measure has already been introduced into the agenda …

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By Patrick Haller

Argentina‘s students didn’t take to the streets recently like students in Chile and Colombia did, but that doesn’t mean they wouldn’t like to see some changes to the country’s education system. While literacy rates and primary school completion are high for the region, access to university to study IT or other advanced subjects essential for a thriving technology sourcing environment is often limited. Low income, and the system for granting higher-level degrees, are usually the culprits.

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Source: Hispanic Business

President Obama said the U.S. will strengthen relations with Argentina, after Cristina Fernandez began her second term as Argentine president last week.

In an interview with Argentine newspaper La Nacion published Monday, Obama said closer bilateral ties will help the two countries “to achieve even more.”

The U.S. and Argentina will openly discuss new challenges of the bilateral relations in a responsible way to be sure that any disagreement can be effectively resolved, the report cited Obama as saying.

Obama also said he hopes Argentina will deepen cooperation with the international community in countering terrorism, curbing drug smuggling and tackling the Iranian nuclear issue.

Obama and Fernandez met at a G20 summit in Cannes, France, in November when they discussed cooperation in science, technology and energy.

During the meeting, the two leaders promised to expand cooperation in the peaceful use of the space and joint research on global climate change, …

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Source: Buenos Aires Herald

Argentina will receive a loan worth US$400 million, or 1.7 billion pesos, from the Inter-American Development Bank to carry out infrastructure improvements in poor neighbourhoods, the government said yesterday. The decision follows an about-turn made by the US to approve credits to President Cristina Fernández de Kirchner’s government after several refusals to do so.

According to the Planning Ministry, which announced the new loan, the programme will help the urban and social inclusion of households living in precarious conditions. “Up to 70,000 families will benefit from infrastructure improvements including the provision of drinking water, sewers, gas, lighting for streets and homes and public spaces,” it said in a statement. That means that around 280,000 people who live in shantytowns or irregular housing will be affected for the better by the investment which will finance phase three of the so-called Neighbourhood Improvement Programme (PROMEBA).

The funds …

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Source: Bloomberg

Argentina is more than doubling electricity rates for the biggest commercial users as President Cristina Fernandez de Kirchner seeks to stem a widening budget deficit without a return to international debt markets.

Argentine power rates will more than double for some industries beginning next month as the government reduces subsidies, according to a statement in today’s official gazette. Power rates during peak hours will increase to 254 pesos ($60) per megawatt hour from 111 pesos.

Fernandez, who was re-elected in a landslide vote on Oct. 23, is seeking to stem a widening budget deficit by cutting subsidies that will swell to about 72 billion pesos this year, or about 4 percent of gross domestic product, according to Moody’s Investors Service. Power generators in Argentina include Pampa Energia SA (PAMP), AES Corp. and Petrobras Argentina SA. (PESA)

“The announcement is positive, it shows that the government is moving toward a normalization …

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