Argentina’s manufacturing industry faces a triple challenge: new measures to expand import liberalization, Brazil’s currency devaluation, and the appreciation of the peso. The Economy Ministry has hastened the elimination of the PAIS tax, and the Central Bank is preparing to continue dismantling the foreign trade restrictions. Meanwhile, the currency of Argentina’s main trading partner suffered a new setback, with an accumulated 20% decrease in the last 12 months. The services account, the balance of service operations through the foreign exchange market, showed a deficit of over US$744 million in October.

The strong volatility of Brazil’s financial markets dominated weekend conversations in the Argentine business community. Brazil is Argentina’s main trading partner, the largest destination for industrial exports, and an unquestionable reference among emerging countries.

Finance Minister Fernando Haddad pledged to cut spending by almost US$12 billion in two years, but the announcement did not convince the markets. Haddad also confirmed an income tax exemption for those earning up to US$840 a........

© Buenos Aires Herald