Argentina Politics Update - 26 July 2023
Surprise JxC mayoral win in Córdoba, new "agro dollar" introduced, decrease in overall electoral participation
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Politics
Poll: if Larreta wins the primary, over half of Patricia Bullrich’s voters would go to Milei (Buenos Aires Times)
A survey by Federico González & Asociados consulting firm showed the following results:
Juntos por el Cambio (JxC) opposition coalition would win the August PASO primaries with 34.2% of the vote; Unión por la Patria (UP) ruling coalition would come in second with 28%
Economy Minister and UP candidate Sergio Massa would gain the most amount of individual votes, with 22.9%
Former security minister Patricia Bullrich would beat Buenos Aires City Mayor Horacio Rodríguez Larreta for the internal JxC nomination, 61.7% to 38.3%
Should Bullrich not win the primary, 30.2% of her voters would turn away from JxC in the general election to support libertarian Javier Milei
97.1% of social leader Juan Grabois’s voters would choose Massa in the general election
Peronism surprisingly beats JxC in Córdoba city mayor elections (Buenos Aires Herald, Buenos Aires Times)
Peronist Daniel Passerini defied polls and won the election for mayor of Córdoba with 47.67% of the vote, beating JxC opposition coalition favorite Rodrigo de Loredo
Polls had de Loredo winning by 14 points
Juan Schiaretti, current Peronist governor of Córdoba, is running for president; he is set to end his second term as governor at the end of the year
“‘Schiarettism’ beat JxC in both the provincial and city elections, a salient fact given that Córdoba is considered a strong supporter of the opposition coalition”
Elections 2023: electoral participation decreased in almost all of the provinces and worries presidential candidates (Infobae)
Analysts blame society’s being fed up with politics and the lack of enthusiasm surrounding the presidential candidates as main causes of the decrease in voter turnout
The PASO primary elections tend to have lesser turnout than the general elections, meaning candidates must adjust their expectations
Electoral participation compared to 4 years ago decreased in 14 out of the 16 provinces that held gubernatorial elections so far this year, with 7 of those provinces not even reaching 70% voter turnout
Córdoba and Santa Fe, two of the country’s most prominent and important provinces, did not reach 60% turnout
Your guide to Argentina’s coalitions (Buenos Aires Herald)
An overview of the country’s main coalitions, their seats in the House of Deputies and the Senate, some of their most prominent political stances, their presidential hopefuls, and the reason behind the constant name changes, among other topics
Bullrich said if she wins the election, she will lead a government of “absolute coalition” (La Nación)
Bullrich would aim to have participation from all provinces in her administration, ensuring a “totally federal” government
CABA Elections: who are the pre-candidates for the head of the Buenos Aires City government (Infobae)
The two JxC candidates Martín Lousteau and Jorge Macri replicate the national discourse between Bullrich and Larreta, respectively, at the local level
The results of the porteño election could impact the next administration’s ability to rule effectively, working either in tandem or in contrast with the new government
Economics
Argentina to weaken peso with trade taxes in bid for IMF funds (Financial Times, Reuters)
The new exchange rate would be for agricultural exports and levies on imports, according to the economy ministry
“Corn and other crop producers will be offered 340 pesos a dollar to liquidate their stock, compared with the official rate of 268”
Argentina owes about $3.4 billion by August 1
Massa announced that the IMF would disburse funds in August and November, though the specific amounts were undisclosed
Bullrich, Larreta, and Milei say they’d eliminate export duties (Buenos Aires Herald)
Juan Sciaretti also shared this position of eliminating export duties on agricultural commodities
Massa, on the other hand, said he would “progressively reduce agricultural taxes… but wouldn’t eliminate them”
Beginning September 1, export duties will no longer apply on regional economy products such as yerba mate, wines, and rice
Bullrich proposed “state austerity” and a fast and blunt removal of export duties and currency restrictions
Larreta discussed a gradual reduction of export duties
Milei announced his plan of applying an “exchange rate unification”
IMF Seeks to Stop Argentina’s 116% Inflation From Getting Much Worse (Bloomberg)
The IMF on Tuesday presented a new forecast for Argentina’s growth in 2023, expecting a 2.5% economic contraction due to the impacts of the country’s severe drought on agricultural production and exports
The multilateral institution also forecast a drop in inflation to 98.6%, from a previous expected 120%
Insight: Some Airbnb hosts try to beat Argentina's inflation with dollar rates and tax avoidance (Reuters)
Charging for Airbnbs in dollars helps hosts hedge against ever-increasing inflation
Some hosts take additional measures such as receiving payments to an overseas bank account or a global platform such as Payoneer to avoid foreign exchange controls and income tax on Airbnb earnings
Reuters explains, “When hosts exchange dollars to pesos on informal markets, they divert funds from the official economy, contributing to a drain on foreign currency reserves that has left the country struggling to make payment on debt and imports”
Lithium + Energy
Argentina hits milestone on path to gas export bonanza (Financial Times)
The recently-inaugurated Nestor Kirchner gas pipeline will begin to provide gas to Buenos Aires from Patagonia in the next couple of weeks
The expected increase in gas production and exports will turn energy into Argentina’s second-biggest export after agricultural products
The pipeline is forecast to save Argentina $1.7 billion in 2023 and $4 billion in 2024, and provide a much-needed source of foreign currency
Allkem and Xantippe shore up lithium investments in Argentina (BN Americas)
A $180 million loan from the International Finance Corporation (IFC) unit of the World Bank will allow Allkem to elevate its Sal de Vida project in the Catamarca province
Xantippe is seeking to raise $31 million to grow its Carachi project and expand further
Hxagon provides risk analysis and bespoke investigations in emerging and frontier markets, primarily in Latin America. If you are interested in our work or acquiring our services, do not hesitate to contact us!
Contact: info@hxagon.com
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