The surge in shale oil and gas production in the Vaca Muerta field over the past few years has turned Argentina from a net energy importer into an exporter, meaning that – unlike during previous energy price shocks – the country is now experiencing a terms of trade windfall. The shift in Argentina’s energy balance will also provide more support to the peso, although it still looks overvalued. And a further adjustment will be needed to reduce vulnerability to a future decline in energy prices.
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