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ECONOMY | 02-06-2018 08:17

May 28th - Jun 3rd: Economy in brief

Top stories of the week regarding the economy.

AEROLINEAS TO SWITCH SUBSIDIES FOR DEBT FINANCING BY 2020

Argentina’s national airline Aerolíneas Argentinas will phase out its reliance on state subsidies by next year, as it looks to cover its shrinking deficit with debt financing, the company’s CEO confirmed this week. Aerolíneas will receive US$82 million in subsidies this year, a significant drop from the US$180 million it took in last year. “Today, Aerolíneas [Argentinas] and Austral earn US$2.6 billion, which means that if our deficit this year is between US£20 to 30 million it will be the equivalent of two percent of our earnings,” CEO Mario Dell’Acqua said during a press conference on Tuesday.“It’s no longer necessary for us to continue requesting money from the Argentine taxpayers with this level of loss. We can cover it by taking on debt,” he added.

COCA-COLA TO BOOST INVESTMENT PLANS

The Coca-Cola Company intends to boost its planned investment in Argentina over the next three years to US$1.2 billion. In a press statement, Coca-Cola said it would improve on its scheduled investment for 2016 to 2018 of US$1 billion, citing the “responsibility of the corporate sector.” João Marcelo Ramires, president of the South Latin America Unit of Coca-Cola said: “We are aware of the responsibility that touches us as a business sector at this momentous moment for the country and, therefore, we renew our commitment to Argentina, where we have worked with passion for 75 years to create shared value with society.”

TRANSPORT FARES RISE

As from yesterday the minimum bus fare (up to three kilometres) rose fom nine to 10 pesos while a train ride goes up from 3-6.25 to 3.25-6.75 pesos, depending on the line. Bus fares rise with longer distances too, reaching 11.25 pesos for range of 12-30 kilometres. The cost of transport has thus risen by over 60 percent in the first five months of the year.

BIODIESEL DUTIES UP

On Monday, export duties on biodiesl were almost doubled to 15 percent from the 8 percent levied in January on the previously duty-free product. It is not clear how much revenue will be raised in real terms because any biodiesel entering the United States would have to pay import duties of 60-86 percent imposed by the Donald Trump administration on top of the 15 percent charged at the other end while the European Union is looking into accusations of dumping against Argentine biodiesel.

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