The Vaca Muerta shale formation will alleviate some of the pressure on Argentina’s fragile balance of payments position by substantially reducing the country’s gas import bill and raising oil export revenues. While this is good news for the crisis-ridden economy, it won’t let the next administration off the hook when it comes to addressing the misaligned exchange rate and pushing through the measures needed to stabilise the economy. The risks of the next government putting all the eggs in the Vaca Muerta basket are highest if current Economy Minister and Peronist Sergio Massa becomes president.
In view of the wider interest, we are also sending this Latin America Economics Update to clients of our Energy service.
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