Contents

Introduction

The Argentine economy faces a 2018 marked by two major challenges: maintaining the path of growth, which according to estimates from the IMF was 2.8% in 2017, and taming an inflation that ended the year at 24.8%, far from the 17% targeted by President Mauricio Macri's administration.

But it will not be an easy task for a country whose economy is just beginning to recover from years of economic mismanagement under former president Cristina Fernández de Kirchner. To that end, the government has rolled out pension and tax reforms, seeking to cut public spending in order to curb the growing fiscal deficit and slash inflation.

One industry that shows clear signs of recovery is the financial sector. Despite inflation and an annual interest rate of 28% (which was cut 75 basis points by the monetary policy committee in the early days of 2018), the sector is beginning to regain the trust of a society that has viewed it with disapproval following crises such as the 2001 freezing of accounts, or 'corralito,' to stop a run on banks. One way it has done so is by offering mortgage loans, which had not been seen in the country in decades.

"Argentina's mortgage market hadn't taken off in many, many years, and we've made such a significant change that right now its monthly growth rate is 8% in real terms, and we ended the year with 100% growth," said central bank president Federico Sturzenegger.

The following report will study the current state of Argentina's financial services sector, giving you a sense of the general state of affairs and where we are headed.

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