Argentina: is Macri already a busted flush?

The Argentine government’s recent upward revision to its 2017 budget deficit forecast has added to concerns that President Macri’s reform agenda is already starting to slow after less than a year in office. However, while it’s true that momentum has stalled in recent months as attention has shifted to next year’s legislative elections, a more gradual approach to fiscal retrenchment is probably justified given current economic weakness. In the meantime, it’s worth bearing in mind that Mr. Macri has already made substantial progress in other areas, including liberalising the exchange rate and scaling back government subsidies.