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[Prudent Capitalist]

Don't Cry for Argentina's Investors

BLOOMBERG, April 5 -- In the four months since former Buenos Aires Mayor Mauricio Macri was elected president, Argentina has become a lodestone for global investors. They're anticipating the biggest spurt of growth in Latin America, a corresponding retreat of inflation and the best returns from the continent's healthiest companies.

Markets often bestow a halo on new governments that fades when promises can't be kept. Investors in Argentina are too familiar with disappointment to declare that this time is different.

Yet maybe it really is. Macri is the first elected president in 100 years who isn't connected to either the party of Juan Peron or the radical alternatives historically preventing Argentina from growing into a sustainable developed economy.

Sure enough, the new government eliminated currency controls and most export tariffs on agricultural products, for example lowering duties on soy exports by 5 percentage points to 30 percent. The government devalued the peso almost 30 percent against the dollar by allowing it to float, and permitted unfettered access to the foreign exchange market for the first time in four years.

http://www.bloombergview.com/articles/2016-04-05/don-t-cry-for-argentina-s-investors


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