Oct 28, 2010

Argentina: The Economic Outlook Is Cloudy Because Of External And Domestic Factors

“While overall economic growth is still robust right now, the economic outlook is cloudy because of external factors and domestic factors. The growth of the economy that is coming from the net export part of the economy is going to weaken over time because global economic growth is slowing down and exports and imports globally are going to slow down.”

With a domestic economy that is driven by mostly domestic demand right now, artificially boosted by easy money, easy credit and easy fiscal policy, and an external sector that so far is doing well, but with the fixed exchange rate and high inflation, the real appreciation is going to lead to a significant weakening of that account.”

Nouriel Roubini, in a Buenos Aires speech, October 27