New reasons to cry for Argentina?

Thursday, November 16th, 2023

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 !


Hubert Fromlet
Affiliate Professor at the School of Business and Economics, Linnaeus University
Editorial board


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Argentina in deep crisis again

Friday, August 23rd, 2019


Argentina åter i djup kris

Sammanfattning / Brief summary in Swedish

Resultatet av Argentinas primärval helt nyligen försatte landets finansmarknader i rent kaos. Utmanaren, peronisten Fernandez, vann tydligt över regerande presidenten Macris gruppering. Kort beskrivet står Fernandez politik för stark statlig styrning, medan Macri företräder tydliga marknadsliberala värderingar.

Orsaken till Macris valförlust är att hans saneringsförsök uppfattades som alldeles för hårt av väljarna. Följaktligen tyder en hel del på en Fernandez-seger vid presidentvalet den 27 oktober. Peronistisk ekonomisk politik har ständigt misslyckats under de senaste årtiondena. Men inte heller Macris insatser kan framstå som speciellt framgångsrika. Tyvärr finns det nu ytterligare en akut kris i vår redan tillräckligt krisdrabbade värld – förmodligen utan att sätta djupare globala spår. Men Argentina är Sydamerikas näst största ekonomi.


Though it not a new phenomenon, the world feels again sorry and worried about a new economic crisis in Argentina. Ruling president Mauricio Macri was recently defeated strongly in Argentina’s primary elections by the Peronist Alberto Fernandez, leftist candidate for the presidential election in October 27 this year.

Most observers think now that Fernandez will be the new president of Argentina. This is why financial markets reacted so chaotically on his recent landslide victory. Sure, Macri’s liberal economic policy has been very tough – obviously too tough – for the Argentine people. On the other hand, financial markets know that Peronist economic policy always failed in the past.

Thus, fears of renewed strong state interventionism was enough to provoke financial panic on August 12, the day after the primary elections. Enormous falls were noted for both the peso and the stock and bond markets – without contagion to other emerging markets. But Argentina is the second largest economy in South America.


The turmoil happened when the economy already for some time had been affected by an ongoing economic crisis. GDP fell by 5.8 percent in Q1 this year (Q4 2018: 6.1 percent). Inflation belongs to the highest in the world, in July over 50 percent

Very recently, Macri promised the voters to provide economic policy with a more social profile. Good news? Probably not good enough to prevent Fernandez from winning the forthcoming presidential election.

Unfortunately, there is still reason to cry for Argentina. I really wish to be wrong.

Hubert Fromlet
Affiliate Professor at the School of Business and Economics, Linnaeus University
Editorial board

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Hubert Fromlet
Affiliate Professor at the School of Business and Economics, Linnaeus University
Editorial board


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Argentina – better this time?

Wednesday, May 18th, 2016

This time, I change the content of my blog and turn to South America. Argentina is currently trying to reorganize and restructure its economy – not one single day too early. Now again, long-term observers of the Argentine economy may add.

The Kirchners certainly failed as presidents (2003-2015). Argentina’s relatively new president and former mayor of Buenos Aires – Mauricio Macri – is now trying to restore international confidence in his country by a much more market-oriented policy than the Kirchners were conducting. Some success can already be seen, for example by bringing back Argentina to international capital markets – though at a high interest rate and after an international compromise about the old government debt and the return to a floating currency system against the U.S.dollar (which led to a significant but unavoidable weakening of the peso).

Despite these and some other positive signals, the outlook for Argentina remains very uncertain. The country is still in a recession. Risks for social unrest are still in place.The budget deficit is high, and so is inflation after the abolition of important price regulations and the weaker exchange rate. Trying to give a better balance to the economy remains difficult.

In other words: l am not sufficiently convinced that Argentina will achieve sustainable progresss in its fight against the burdening economic hangover after the Kirchner era. My own analytical experience from Argentina and its economy makes me doubtful.

At least we can now see the start of a better economic policy for the fascinating country of Argentina. Let’s hope for the best ! But Macri and his team are still very far from the goal.

In the meanwhile, we can always watch all these wonderful fotboll players from the country of the pampas. They use to give us fun also during difficult times in Argentina’ economy. By the way, President Macri once was the head of Boca Juniors, the creator of many superstars of Argentine fotboll (soccer). Now he is the president of Argentina.

Hubert Fromlet
Senior Professor of International Economics, Linnaeus University
Editorial board


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