Argentina turns to default

The collapse in Argentine assets this month and the subsequent news that the government will seek to reprofile its debts puts the country on the brink of its fifth default in thirty years. The economy is likely to fall back into recession, although the good news is that the fallout for the rest of Latin America should be limited. Economic ties with Argentina are small, and there has been little contagion to financial markets. Weak global growth and the escalation of the trade war are likely to be bigger headwinds for the rest of the region’s markets.