Buenos Aires Times

Economy in brief: Inflation, Lebacs and foreigners and oil debt

These are some of the main economic news.

Sunday 17 December, 2017
INDEC.
INDEC. Foto:Cedoc.

More Economy News

INDEC: INFLATION 1.4% IN NOVEMBER

Consumer prices in November rose 1.4 percent, bringing inflation to 21 percent for the year, the INDEC national statistics bureau reported on Tuesday. Experts warn that the figure may rise as high as three percent in December, anticipating hikes in fuel, public service tariffs and food. 

CENTRAL BANK HOLDS RATES AT 28.75%

The Central Bank decided to keep its benchmark seven-day lending rate at 28.75 percent on Tuesday, it announced in a statement. Economists consulted by the bank indicated last week they expect annual inflation to close at 23.5 percent for the year.

NORWEGIAN AIRLINE GIVEN AUTHORISATION FOR LOW-COST FLIGHTS

Via a statement in the Official Gazette, the government on Monday granted authorisation to airline Norwegian to operate low-cost flights in and out of the country over a 15-year period. Norwegian will have access to airports in Buenos Aires, Córdoba and Mendoza and will allowed to operate 72 local and 80 international routes. Norwegian announced previously it would start operating next year in Argentina and says its investment will total around US$4.3 billion, creating an estimated 3,000 jobs. More low-cost aviation firms are expected to enter the local market in the coming years, increasing competition for customers.

YPF TO SELL PARTS OF ELECTRICITY UNIT

State-oil company YPF SA will sell a quarter of its stake in its electricity generation unit YPF Energia Electrica to US conglomerate General Electric Co, a source close to the deal told the Reuters news agency this week. Reports in Clarín also suggested the firm may sell a further 25-percent stake to the Blackstone Group. 

LEBACS IN NEWS, FOREIGNERS TO FACE TAX

Lebacs were in the news for at least two reasons – foreigners purchasing them will now be subject to a five-percent tax (which caused a minor upsurge in the dollar) and this Central Bank bond faced competition from the Letes Treasury letters issued by the Finance Ministry at lower rates in order to force Central Bank rates down but could only place 63 percent of the 40 billion pesos offered. 

DUJOVNE PUTS 16% CEILING ON WAGE TALKS

Treasury Minister Nicolás Dujovne on Wednesday set a 16 percent ceiling on next year’s collective wage bargaining as against the 20-percent cap set this year. Dujovne said that the private inflation forecasts for 2018 pooled by the Central Bank averaged 16.6 percent, thus justifying the 16 percent ceiling. 

OIL SECTOR DEBT

Energy Minister Juan José Aranguren admitted at the Oil Day luncheon on Wednesday that the state owed sector companies 26 billion pesos under the current Gas Plan and had no idea when they could be paid. The biggest creditor is YPF state oil company, which claims to be owed some US$750 million.


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