Home' Trinidad and Tobago Guardian : August 3rd 2017 Contents AUGUST 3 • 2017 guardian.co.tt BUSINESS GUARDIAN
REGIONAL | BG15
may spell trouble
for Macri reforms
There is one small problem with Argen-
tina's incipient economic recovery:
consumers aren't feeling it. And that
spells trouble for President Mauricio
Macri in congressional elections in
Even as the latest figures show the economy grew
3.3 per cent in May from a year earlier, consumer con-
fidence in July fell 6.9 per cent year-on-year.
Analysts surveyed by Bloomberg expect the econ-
omy to grow 2.8 per cent this year, propelled by an
agricultural sector that's booming after Macri slashed
prohibitive export taxes on grains. The construc-
tion industry is also starting to hum as tenders for
state-funded infrastructure projects grew by almost
200 per cent. But three key indicators are lagging:
the inflation rate, after falling, is proving stubborn;
industrial activity, the main creator of employment,
is sluggish, and consumption, the main driver of the
economy under the previous government, isn't re-
covering at the same pace.
More worrying for Macri is that the lag in those
sectors is being felt most keenly in the greater Bue-
nos Aires area --- precisely where he will face off in
October against former President Cristina Fernandez
de Kirchner. Victory or defeat will be measured by
whether Macri's alliance garners more votes in the
race for senate seats in the province.
"The recovery is slower and more mixed in the
industrial sector and that has electoral importance
because a large part of industry, the small and me-
dium-sized companies and those more affected by
outside competition, is concentrated in the greater
Buenos Aires cordon," said Martin Ravazzani, an
economist at Ecolatina.
Fernandez, who set up an alliance that broke away
from the traditional Peronist party, leads in all polls
seen by Bloomberg. Investors are treating the elec-
tions as a bellwether of appetite for Macri's reforms:
if he loses to Fernandez they may withhold the injec-
tion of capital he's betting on to sustain the recovery.
Inflation has slowed in 2017 to half of its peak in
2016, but it's not enough to compensate for lost pur-
chasing power last year, said Mariel Fornoni, director
of polling firm Management & Fit.
That's had a knock-on effect on consumption,
which is showing a tepid recovery after three quar-
ters of contraction last year.
While Ecolatina expects consumption to grow by
two per cent in the second quarter, it sees a recovery
of purchasing power delayed until the third quarter,
Ravazzani said. That timing may be cutting it close
for the government.
Meanwhile, industrial production has contracted
for 15 consecutive months on a year-on-year basis.
Textiles, one of the least competitive sectors, have
suffered as the government eased restrictions on im-
ports: they fell 13.3 per cent in May from a year earlier.
Macri could have chosen to hedge his bets by em-
phasizing that the election is about the whole country,
where the reforms have been less painful, not just
Buenos Aires province. But "he's chosen to fight the
election in the one place where he can lose," said Jorge
Asis, a novelist and political commentator based in
Country is on
a growth path
Prime Minister Roosevelt Skerrit says Dominica is
on the path towards prosperity based on the perfor-
mance of the economy.
Skerrit presented a budget of EC$918,255,358 (One
EC dollar =US$0.37 cents) against the backdrop of
the island being on a path of growth in 2016, de-
spite setbacks in 2015 due to the passage of Tropical
Storm Erika. In his presentation themed---"Realising
a modern and prosperous Dominica"---Skerrit said
the economy recorded growth of 2.8 per cent.
"The Eastern Caribbean Central Bank (ECCB) says
the Dominican economy is expected to grow by 3.1
per cent in 2017 and 2018; this buoyant outlook con-
tracts sharply with the rest of the Caribbean and Lat-
in America. The growth experienced by Dominica is
clearly better than the rest of the Caribbean
"This is Dominica's moment and we as a country
must seize it; we could cash in the growth dividend
of successful economic management with a broad
expansion of existing spending programmes. That
would be far easier...but this government is not in the
business of sitting back and basking in its success.
What we propose is a bold journey that begins this
morning," said Skerrit.
The Prime Minister stated that total expenditure is
projected at EC$930,185,008 this includes recurrent
revenue of EC$786,462,296 and recurrent expend-
iture (inclusive of debt service at EC$580,482,418.
He noted that consistent with the anticipated
growth in the economy, tax revenue for the fiscal
year is projected at $365.5 million.
"Taxes on domestic goods and services take up
the largest slice at $203.0 million or 25.8 percent of
the total. This is followed by corporate income tax
estimated at $39.8 million and personal income tax
at $34.0 million."
According to the Prime Minister, non-tax reve-
nues of $421.0 million are anticipated a significant
part will come from the Citizenship By Investment
Programme which is expected to contribute $399.9
million for the year. CMC
Mexico's state run
oil company, Pemex,
on Thursday reported a
32.8 billion peso (US$1.8
profit, helped by higher
sales and lower financial
It was the oil giant's
third straight quarter
in the black, and it pre-
viously reported three
quarters in 2006.
Revenue at the com-
pany, officially Petrole-
os Mexicanos, jumped to
nearly 322.5 billion pesos
in the quarter, up 26 per
cent from 255.7 billion
During the quarter, the
average price for Mexico's
crude export mix rose to
US$42.80 per barrel from
US$36.59 a year earlier.
"Our net accumulat-
ed positive result of 121
billion pesos during the
first half of this year is
a clear signal that we've
improved; our finances
are on the right path," said
Juan Pablo Newman, the
chief financial officer, on
a call with analysts.
Crude exports were up
4.3 per cent during the
quarter to reach about
107,000 barrels per day
Total crude production
for the quarter, however,
averaged 2.013 million
bpd, down 7.5 per cent
compared to output dur-
ing the same period last
Pemex hit peak crude
output in 2004 with 3.4
Meanwhile, natural gas
output fell about 12 per
cent during the quarter
to average 4.336 billion
cubic feet per day.
On the plus side, the
company reported high-
er financial income and
lower financial costs
during the quarter.
Long a major source of
tax revenue for the gov-
ernment, Pemex now
contributes less than a
fifth of federal revenue,
down from more than a
third a few years ago.
($1 = 18.143 Mexican
pesos on June 30)
CDB helping Jca bank
better manage social,
The Barbados-based Caribbean Development Bank
(CDB) has approved a grant to support the Devel-
opment Bank of Jamaica (DBJ) in efforts to address
environmental, social issues that can deter investment
or impact job creation, growth and poverty reduction.
The CDB announced that it will provide US$55,400
in funding to support the design of an environmen-
tal and social management system (ESMS) to better
manage environmental and social risks in its portfolio.
"As a financial intermediary for CDB's resources,
DBJ is required to have in place policies and procedures
to ensure the effective management of environmental
and social risks in its portfolio. This grant provides
technical assistance for the design of an ESMS, which
will complement the Bank's ongoing efforts to manage
its lending operations in accordance with applicable
national, environmental and social legislation and
regulations," said Daniel Best, director of projects,
The funding from CDB will support: a review of
DBJ's investment operations to determine the level of
environment and social risks in its portfolio; update
and finalise DBJ's environmental and social policy;de-
sign an ESMS appropriate to DBJ's operations; develop
operational procedures for the ESMS and the design
and execution of a training workshop for DBJ's staff
and that of its approved financial institutions and
micro finance institutions.
The project will be executed through the office of
the managing director of DBJ. CMC
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