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A new Argentina
The Emerging View
27 March 2015
We believe that Argentina will be a different place a year from now with a new and more pragmatic
government running the country. All the main contenders for president in the next government have
similar economic programs that involve: a moderate adjustment of fiscal policy; replacing central bank
financing with external borrowing; gradual monetary tightening; and quickly resolving the holdout issue.
As Argentina returns to capital markets to finance the settlement with holdouts, the country’s index
weight will rise considerably from today’s very low levels. The main near-term macroeconomic risk –
a balance of payments crisis of Argentina’s own making – is receding due to a myriad of successful
ad hoc capital raising exercises by the government.