Argentina’s Economy Contracted 6.7% in June From Year Earlier

"The rapid decline in real GDP in the second quarter is mainly due to the impact of bad weather in agricultural production and the tightening of the financial environment to the entire economy," said Goldman Sachs.

Economists predict that Argentina will fall into recession this year due to plunging of emerging market currencies and investor concerns about President Mauricio Macri 's spending cuts and inflation reduction abilities. The country's currency fell sharply against the dollar.

Earlier this month, the Central Bank of Argentina raised the interest rate from 40% to 45% to curb national currency and inflationary pressure in the event of an accident, reaching 31% last month.

After selling the currency in May, Mr. Markley called for a $ 50 billion credit line from the International Monetary Fund to support the government. This is expected to reduce the government deficit by 5% of GDP last year.

The economic outlook for the month is even more complicated, construction company corruption scandal, former president Christina Chisina's bribery, a multi-million dollar bribe, and Christina Chisina denies these claims.

Bank of America Merrill Lynch recently has a political benefit to the government as a corruption scandal affecting opponents, but as some companies involved in ongoing government government project projects are being investigated economic He said there was a high probability of hindering recovery. "

"The economic recovery will be slow and will be reflected in a weaker peso than we initially anticipated," the company said.

Earlier this year Argentina was forced to reach an agreement with the International Monetary Fund, as the currency fell sharply and the peso soared. A three year backup financing agreement aims to strengthen its weak economy and help it fight inflation with an annual inflation rate of 30%, one of the world's highest inflation rates. The International Monetary Fund (IMF) said in a statement that "emphasis is placed on protecting Argentina better from recent global financial market changes, such as strengthening financial and fiscal policies, strengthening support for the vulnerable of society We will amend the government's economic plan. " Group Initiatives "

Take Argentina as an example and underestimate imported products. Argentina achieved economic transformation in 1991 and brought public exchange between the peso and the US dollar. Formerly Argentina extended the Value Added Tax (VAT) system. In other words, the average tax rate of imported goods is about 18% of the invoice price, then 21%, and there is also a tariff and a handling fee. It took a long time for Argentinian traders to understand how to use open exchange and dollar bank accounts abroad to reduce VAT. In cooperation with foreign suppliers imports are often very underestimated so the value added tax paid on goods arriving in the country will decrease. Importers then correctly paid the amounts indicated from these manufacturers.

1853 - In Argentina, the development of the gold standard is about 100 years. After that, the Argentine central bank was established in 1932, after which the collapse of the Argentine economy began. Then Juan Peron participated in the 1943 revolution, and the reserves were exhausted, leading to the collapse of that year 's economy. Argentina keeps using bank notes. As a result, the Argentine economy ranges from the eighth largest country to the deepest in the world, but since it has a serious impact on the national economy, the financial strength has not recovered to this day.