Argentina

The consequences of the war between Ukraine and Russia, which have aggravated the disruption of global supply chains following the impact of the COVID-19 pandemic, have led to a significant increase in fiscal deficits and the return of a phenomenon that had been overcome: an inflationary outbreak. Managing countries' economic policies at this stage has been a challenge that has cost several finances ministers their jobs. Among them, the most notable resignations have been those of Simon Cueva from Ecuador, Rishi Sunak from England, and Martin Guzman from Argentina. This flash report will address the impact of Martín Guzmán's departure from Argentina's Economy Ministry as a corollary of a crisis that continues to escalate despite the agreement signed with the International Monetary Fund. 

Ecuador

After 18 days of protests that raised political and social tensions in Ecuador, the Lasso Administration faces the challenge of re-establishing political dialogue to keep the proposed economic reforms on track. However, this new episode cost the departure of Simon Cueva from the Ministry of Economy, making way for a new management that emphasizes social investment and public infrastructure. Thus, this report will take stock of this new conflict and the prospects regarding the possibilities of the Lasso Administration resuming the path of economic reforms and increasing oil production.  

Bolivia

Bolivia approached international markets once again to carry out operations to purchase and exchange its sovereign bonds for USD 2 billion, maturing in 2022, 2023, and 2028. However, the government announced that it was only able to place USD 800 million, which seems to indicate that the market was not sufficiently “enthusiastic” with the offer presented. Thus, this report will review the current state of Bolivia’s public finances and its external position, which faces a significant challenge in terms of the sustainability of the current exchange rate given the continuing fall in international reserves.

Venezuela

Following the first round of high-level talks between the U.S. and Venezuelan delegations, expectations have focused not only on the possibility of Venezuela’s oil production recovering and returning to the U.S. market but also on the possibility that negotiations with PDVSA and sovereign debt creditors may gain new momentum, supported by the potential increase in oil revenues. This report will address the current situation of Venezuela’s financial debt and the conditions necessary for a debt restructuring process to be possible in the context of a potential easing of U.S. sanctions on the Maduro Administration.

El Salvador

Although El Salvador’s Minister of Finance, Alejandro Zelaya, has stated that “the risk of default is zero,” agencies such as the International Monetary Fund have highlighted the risks associated with the country’s high and increasing financing needs. Thus, this report will review the main challenges that El Salvador must face to avoid fiscal unsustainability, among which the upcoming USD 800 million principal maturities in January 2023 stand out.