In my earlier professional life, I had the pleasure of having quite frequent visits to Argentina. Argentina is a wonderful country with gentle people and fascinating nature. And all these wonderful football (soccer) players. Unfortunately, it is hard to see how the economy could improve after the ongoing presidential election. Sorry to say that economic policy has been a disaster for many decades. It seems difficult to see promising policy changes in the near future.
The current economic situation
Before looking into the future, it may be worthwhile summarizing briefly the current state of Argentina’s economy. Here are some important indicators:
¤ GDP growth : -4.9 % Q2 (yoy)
¤ Unemployment: 6.2 % (June)
¤ Inflation (CPI): 143 % (Oct)
¤ Current account to GDP: -0.7 % (2022)
¤ Government debt to GDP: 85 % (2022)
Most worrisome among the five key indicators are high inflation and the weak development of GDP. The three other indicators look currently still acceptable.
Will developments turn better?
There are still two presidential candidates in the second election round on November 19. One is the current minister of economy, peronist Sergio Massa, mostly launched as candidate of the middle or even left. As a minister, Massa has already implied different regulations and controls of prices and imports.
The other candidate is the extreme libertarian, anarcho-capitalist Javier Milei – with lots of strange and extreme plans. Only his idea of closing down the central bank, the introduction of the U.S.dollar as Argentina’s currency and the neglect of global warming can make me scared.
After having studied the economic programs of the two remaining candidates – the most business-oriented candidate has already failed – my political and economic worries about Argentina have not declined. It could be a good idea for the current and next President of the United States to co-operate more with this strongly urbanized and pressured country.
One hundred years ago, Argentina still belonged to the 10 wealthiest countries in the word. After this glorious time, the descente went on almost without interruption. Hard to see that the next president will achieve all the badly needed changes !
Affiliate Professor at the School of Business and Economics, Linnaeus University