|P||From a newsletter by the Economist magazine|
|Alberto Fernández, Argentina’s beleaguered president, kicks off his European tour this week. He will meet the leaders of France, Italy, Portugal and Spain to beg for more time to repay Argentina’s enormous debts. The country, led by an increasingly unpopular Mr Fernández, owes $2.4bn to the Paris Club, a group of government lenders, and a record $45bn to the International Monetary Fund. Mr Fernández argues that the debt is unpayable in current conditions—ie, the pandemic. To help his case he is seeking support from his country’s most hallowed son, Pope Francis. Argentina’s economy minister, Martín Guzmán, will also visit the Vatican, to lobby Kristalina Georgieva, the IMF’s chief, before they both attend a seminar with the pope. The politicians are nervous ahead of Argentina’s monthly inflation figure, released on Thursday, which is forecast to show inflation heading towards 50% this year. That’s almost double the government’s target, and another headache for Mr Fernández.|
|From an Economist newsletter:|
|After increasing Brazil’s benchmark interest rate for the first time in six years in March, the central bank is expected to boost it again today, this time to 3.5%. By June, it is expected to be pushed to 4.25%. The situation in the county is dire, as it slogs through a calamitous recession and a second wave of covid-19 infections. It has the second-highest number of coronavirus deaths in the world. Loan defaults and unemployment are rising as repayment pauses end and emergency aid is slashed. Inflation, in turn, has shot past its predicted level for 2021. Analysts expect it will reach 5.04% by the end of the year, well over the government’s goal of 3.75% and last month’s forecast of 4.81%. Swelling food, fuel and energy prices continue to widen Brazil’s inequality gap. As prices soar, Brazil’s descent continues.|
From an Economist newsletter:
Brazil’s statistics agency will today release GDP figures for 2020. Thanks to generous handouts to the poor since the start of the pandemic, which fuelled consumption, the economy fared better than many had feared. A survey by Fundação Getulio Vargas, a university and think-tank, predicts growth of 2.5% in the fourth quarter compared with the previous quarter, and an annual contraction of 4.3% for the whole year. Brazil’s covid-19 dip followed three years of muted growth (around 1%) and exacerbated a fiscal crunch, with public debt approaching 100% of GDP. Fears that economic populism may trump reforms in the lead-up to an election in 2022 have sent the country’s currency tumbling in recent weeks. Unemployment is nearly 14% and could rise again with new lockdowns due to another spike in covid-19 deaths, the worst yet. The central bank’s weekly survey of financial institutions forecasts GDP growth of 3.3% this year. That may be wishful thinking.