Timeline: Argentina’s economy in the throes of a year of “endless storms”

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BUENOS AIRES (Reuters) – Argentina ends a year of “endless storms”, in the words of President Mauricio Macri. External and internal shocks to the economy halved the value of the peso against the US dollar, spiked inflation into an upward spiral, and plunged the country into a deep recession.

Here are some of the key events of Argentina’s very bad year.

January 11: Official data for 2017 shows inflation in Argentina well above the central bank’s target, fueled by rising prices for utilities, gasoline and public transport.

January 23: Argentina posts a trade deficit of 8.5 billion dollars for 2017, against a surplus the previous year. Total imports jump under the effect of the economic recovery and trade liberalization of Macri, while exports decline in part due to a strong peso.

March 5: Argentina’s central bank sells $ 30 million in the spot market, the first significant intervention during Macri’s tenure to bolster the peso amid growing investor doubts about its ability to cope with the country’s deficit and trade imbalances .

March 12: Hope is lost for any recovery in Argentine soybean yields hit by a four-month drought that shows no signs of slowing down. The season is “dead” for the country’s first export.

March 13: The Minister of Finance says Argentina will not sell any additional foreign bonds in 2018 and acknowledges that investors are concerned about the country’s rapid build-up of debt after it returns to capital markets.

March 21: The US Federal Reserve makes the first interest rate hike of the year, strengthening the dollar around the world and triggering capital outflows from riskier emerging markets.

April 23: Benchmark 10-year US Treasury yields hit their highest level in over four years on rising inflation expectations, reducing the attractiveness of emerging market assets.

April 25: After using more than $ 600 million in two days, the central bank sells an additional $ 1.47 billion in reserves in the forex market, its biggest intervention in the past 15 years to defend the peso.

June 7: Argentina and the International Monetary Fund reach agreement for a three-year, $ 50 billion stand-by loan agreement, which the Macri administration says is necessary to provide a safety net and avoid a crisis.

August 2: New figures show that in June, Argentina’s industrial production experienced its biggest annual decline since the country’s economic crisis in 2002.

August 13: Under pressure from volatility in other emerging markets, particularly Turkey, the peso slips to an all-time low of 30 per US dollar.

August 17: Macri acknowledges that more Argentines are likely living in poverty now compared to last year, as the country’s economy slips into recession following the currency crisis and severe drought that has affected to agricultural production.

August 30: Argentina’s central bank raises its key rate to 60% from 45% as the peso collapses, hitting a record low of 42 per dollar before ending the day around 38.

September 3: Macri announces new export taxes and sharp spending cuts in an “emergency” attempt to balance next year’s budget as his center-right government seeks to persuade the IMF to accelerate loan disbursement.

September 25: The largest union calls for a 24-hour strike to protest Macri’s management of the economy. On the same day, Argentina appointed a new central bank director, its third in 2018.

September 26: The IMF increases its three-year loan program with Argentina from $ 7 billion to $ 57 billion. The central bank pledges to end large-scale interventions to support the struggling peso and adopts a trading range.

October 3: The Argentine peso rallies for the third day in a row after high-interest short-term debt issued by the central bank soaks up liquidity to help lower inflation.

October 24: Argentine police fire rubber bullets, tear gas and water cannons at protesters marching through Congress against the government’s 2019 budget bill.

November 15: Argentina’s Senate gives final approval to the government’s 2019 budget bill, blocking unpopular spending cuts and tax increases included in the country’s financing deal with the IMF.

Compiled by Scott Squires and Gabriel Burin; Editing by Ross Colvin


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