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Trying to Gauge the Impact of Argentina’s Situation in Mercosur Partners

Posted August 05, 2014

Under Economic Issues, International Trade Issues

(MercoPress)

Argentina’s debt problems threatens to worsen trade tensions in Mercosur, adding to the economic woes of Brazil in a tense election year and causing headaches in Uruguay as the Argentine economy looks likely to plunge deeper into recession.

Brazilian exporters of goods ranging from shoes to cars and busses are reckoning on lower sales, while hotels and other tourist attractions in the hip Uruguayan beach resort of Punta del Este are bracing for a slow summer season after Argentina’s refusal to pay holdout bondholders.

The 'selective default' is likely to hurt Argentine purchasing power because inflation, already running above 30%, is heading higher. Read more here.