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12/4/08

Argentina gets stimulated

Klishtina explains that credits will not be available for plastic surgery.

This morning Klishtina unveiled a P$13.2Bn economy stimulus package for the Argentine economy. Most of that hefty sum (well, U$3.82Bn is what used to be considered a hefty sum until the Benny&Hank show rolled into town) is available via credit lines at Argentina's state Bank of Investment and Foreign Commerce (the Banco de Inversión y Comercio Exterior, normally known as BICE). Mostly for industry, of course, but a chunky P$3.5Bn (just over U$1Bn) is for consumer white goods credit. Great time to change that old washing machine, my porteño friends.

Also in the package is a 5% drop in export tariffs for Argentine grains. Remember all that fighting when they tried to put the tax up this year? Here we are dropping the tax and the agro boyz say it's too little too late. Bunch of ungrateful idiots is what Otto says; this move is one of those moments that proves even the weird, pretzel economics logic they use in the bosom of Peronism sometimes gets it right.

Other people think so too, as the Merval index is rallying today and beating out all other local stock markets. Up 3% today and 9% in the last couple of sessions (i.e. since unofficial word of the package hit the streets of downtown BsAs). So all in all a fair response from the Klishtina gov't to the recessive powers imported from afar. I'm no fan of these K people, but this is a good move (not perfect, but good) at the right time. Good to see.