EM LATAM CREDIT: Argentina President, Econ. Minister Re: Return to Intl. Market

ARGENTINA: Return To International Markets Seen This Year, Economic Activity Due

• Speaking in a local TV interview yesterday evening, President Milei said that the government can continue to reduce taxes, as long as the economy continues to grow. He also said that the country is nearing the point where it can regain access to international markets.
• His comments on the latter were echoed by Economy Minister Caputo who, speaking at a separate business event, said that he is optimistic on returning to markets this year. Caputo said that this would be used to refinance capital payments, as the government has enough of a budget surplus to make interest payments on its debt.
• Separately, Caputo said that the government would cut tariffs on some industrial goods to the Mercosur threshold of 12.6%. Currently, tariffs on these goods range from 20-35%.
• On the data front, economic activity is expected to have risen by 6.5% y/y in March, following a 5.7% gain previously (2000BST/1500ET). However, Goldman Sachs notes that high frequency indicators portend a soft activity print, owing to headwinds from increased uncertainty and volatility ahead of the new IMF programme announcement.
o March Economic Activity Index YoY, est. 6.5%, prior 5.7%
o March Economic Activity Index, MoM prior 0.8%