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LatinNews Regional Monitor: Brazil & Southern Cone - 23 April 2019

In brief: Argentina

* Argentina’s finance minister, Nicolás Dujovne, has said that the increase in the country’s risk premium is being driven by the “political uncertainty” surrounding the October general election rather than by purely economic considerations. The spread on Argentine bonds in JP Morgan’s Emerging Markets Bond Index (Embi) has been sharply increasing in recent weeks amid concerns about the country’s ability to overcome the economic crisis, reaching 851 basis points earlier this week- the highest spread since 2014. Speaking at a 22 April press conference in which he presented the government’s first quarter financial results, Dujovne said that in his view markets were reacting to the uncertainty over whether the economic policies being pursued by the government led by President Mauricio Macri would be continued under a new opposition administration. Dujovne said that the economic adjustment plan being implemented by the Macri administration with the support from the International Monetary Fund (IMF) is helping to balance Argentina’s books. Dujovne said that the country posted a US$243m primary fiscal deficit in the first quarter compared to the same period in 2018, the first time that Argentina has posted a primary first quarter fiscal surplus in seven years.