On July 4th, the National Executive branch sent a progress report to the Chamber of Deputies on the preparation of the bill for the 2019 General Budget, which estimates an annual growth of 2 percent and an inflation rate of the order of 17 percent. The final bill will be introduced on September 15th as the National Constitution establishes.
For 2018, the growth projection was reduced from 3 to 1 percent due to the impact of three factors: the fall in agricultural production and export earnings, volatility in international financial markets and the global appreciation of the dollar. The report also considers the effects of the rise in the international oil price and the country risk rate.
In this context, the government anticipates that the slowdown in the economy could extend to the third quarter and that the annual inflation rate will be 27 percent. The expected growth for 2019 would be led by an increase in exports (10.7 percent), investment (5.9 percent), and private consumption (1 percent). The document also foresees a contraction in public spending (-3.7 percent.). Regarding monetary matters, it ratifies the floating exchange rate policy with occasional State interventions to soften disruptive behavior.