Caputo denies recession, cites slower growth
Economy Minister Luis Caputo stated that Argentina is not in recession but is growing at a slower rate than before, attributing the deceleration to international shocks and political factors. He made these comments during the Argentina Week event in Paris, which concluded with announcements of approximately US$27 billion in investments despite a rise in country risk during the week. Caputo emphasized that the country continues to grow, though at a reduced pace, similar to other nations facing global economic pressures.[S1][S2][S3][S4]
The minister explained that the country risk, which had fallen from levels between 2,500 and 3,000 basis points to around 600, has recently increased partly due to global oil price shocks and rising US interest rates not seen in nearly 30 years. He noted that other regional economies like Chile and Uruguay have also revised their growth projections downward, reflecting a broader trend of reduced growth and higher inflation. Caputo also acknowledged that electoral uncertainty, particularly concerns about a potential return of Kirchnerism, has impacted financial investors, though he stressed the government is preparing for various scenarios.[S1][S3][S4]
Understand this article deeper
EMAE volatility questioned, better months ahead
Regarding recent economic activity data, Caputo criticized the seasonally adjusted EMAE index for showing unreasonable volatility, arguing that a swing from +2% to -3% in a month is not plausible given the economic transformation underway. He said the government prefers to analyze the trend-cycle component, which indicates 29 months of growth, albeit at a slower monthly rate of 0.2%. He projected that August and September would show improvement, citing better tax collection in September and the upcoming start of construction on 9,000 kilometers of road concessions in October, which he said would boost construction activity and mortgage credit.[S1][S2][S3][S4]
Caputo also highlighted the investment announcements made during Argentina Week, describing them as long-term projects that will generate jobs and exchange rate stability in the coming years. He noted that investors value Argentina's confidence and legal security, and that the presence of governors reaffirming the economic direction adds predictability. The minister dismissed suggestions that the event could have been held in Argentina, arguing that Paris allowed direct engagement with international investors and the French president, creating a focused 48-hour forum.[S1][S2][S4]
