Argentina, located in the southern half of South America with a population of around 43 million, is the 8th largest country in the world and the largest Spanish speaking country. The country with Spanish roots dating back to the 1600’s, has gone through its fair share of turmoil since then. Having gained independence after a lengthy war ending in 1810, the country then found itself in a civil war until its reorganisation as we now know it in the year 1861.
With the second largest economy in South America, behind Brazil, Argentina is defined as an upper middle-income economy, a World Bank classification based on Gross National Income per capita. After much political upheaval in the 1900’s resulting in a military coup in the 70’s, Argentina has a relatively stable political environment
However, the same cannot be said about its economic well-being. Rising inflation has been a problem for Argentina for decades and in 2018 it remains.
The government has now turned to the IMF for help. With a rising budget deficit, the International Monetary Fund have agreed a bail-out package of up to $50 million. The agreement which has been meet with criticism in the country, aims to reduce the government’s deficit by 2020 and steadily reduce inflation to 17 percent by 2019.
Many critics believe that cuts will be forthcoming citing one of the worst economic periods in their history in 2001 when austerity measures imposed by the IMF meant that one in five Argentines were unemployed with millions plunged into poverty.
Argentina’s current woes have been attributed to numerous factors. A severe drought has played its part meaning a 30 percent loss in agricultural activity in April of this year. The currency crisis coupled with this has meant that it is increasingly likely the country will fall into recession for the first time in two years.
For Argentinians the situation does not spell good news for their daily lives. Health care and social welfare is expected to be affected as well as the loss of thousands of jobs. It will be nothing new to those that lived through the 2001 economic crisis, but it won’t make it easier.
While it is not just civilians that are running into trouble, but large brands too. Domestic companies Carsa and Santiago Saenz have requested hearings against bankruptcy while Longvie, a large kitchen retailer, had its debt rating cut.
While these companies are continuing to struggle, the Argentine government is having its own problems handling inflation and the pesos continuing depreciation against the US dollar. Although, they have moved the prediction of inflation from 15 percent to 26 percent, however some private consulting firms have issued a more pessimistic prediction, expecting it to reach closer to 32%
Argentina has had a long history with the IMF which seems to be no closer to ending. However, with the government employing more gradual measures to improves its economy, it’s hoped that the effects on the population won’t be as harsh or as widespread as before
Megan DeGrom was born and raised in New Jersey just outside the Pine Barrons. As a journalist, Megan has contributed to many online publications including Rotten Tomatoes and Variety. In regards to academics, Megan earned a degree in business from St. John’s University. Megan covers economy stories here at Clear Publicist.