The Green Hope Falcon

Impending Economic Crisis in Argentina

Anna Dunn, Staff Writer

Hang on for a minute...we're trying to find some more stories you might like.


Email This Story






Experts say that Argentina could be facing a massive economic crisis in the next few months due to rapidly rising inflation and conditions that are similar to the ones leading up to a previous crisis.  In order to combat this, President Macri has begun talks with the International Monetary Fund (IMF) for an emergency loan of 50 billion, but the general public in Argentina are in opposition of this. Many of them place the blame for the crisis in the early 2000s that left steep unemployment and poverty rates.  Donald Trump has offered his support for Macri’s new economic plan to get the country’s economy back on track. In the statement he released after a telephone call with Macri he said, “I have confidence in President Macri’s leadership and I strongly encourage and support his engagement with the International Monetary Fund.”  Donald Trump supporting the Macri has led to more outcry from Argentinians as Trump is not well-supported there.

Argentinians took to the streets to protest the new policies in early September.  Many of them anticipate more layoffs and less opportunities for those who need work.  Last year when Macri tried to decrease pensions to help with budget cuts, there were even more protests that required security to step in.   Hannah Cieza, a junior whose family is from Peru says she follows this situation very closely. “A lot of people are worried about how this will affect surrounding countries like Peru.  There’s hyperinflation in Peru, but it’s definitely not as bad or as well-known as the problems in Argentina.” Who knows what this effect will have on other countries?

The other main problem contributing to this impending disaster is inflation.  Argentina has the second highest inflation rates of any Latin American country in the world after Venezuela and the most recent estimate on the inflation is 30%.  This is not a new problem in Argentina, however. In the early 2000s after the dollar peg collapsed inflation was very high at almost 40%. Following this collapse the inflation rate stayed constant at around 10% for a few years before today’s high rates have been reached.    

This inflation causes massive problems for Argentinians.  They still remember the aftermath of the crisis in the 2000s and how many middle-class families were plunged into poverty.  This means they are reluctant to take out loans especially variable-interest loans because they could end up paying a lot more than anticipated if inflation rises rapidly (as it generally does).  Banks have also increased the interest rates in order to stabilize the peso, but this has many adverse effects as well. Many businesses choose bankruptcy and shutting down over taking a loan, harming the economy.  To attempt to stabilize the housing market, renting or buying a home is done mostly in US dollars instead of Argentinian pesos, but this makes it very difficult for average middle-class families to afford housing as their salaries are paid in pesos.   

Argentina’s high inflation, interest rates, and potential loans from the IMF have sparked controversy with the government remaining confident in their policies and the people losing their faith as they anticipate more hardships.  

 

About the Writer
Anna Dunn, Staff Writer

Anna is a Junior and she is on the lacrosse team. She is funny but quiet and her favorite color is green. Anna likes to travel. She visited Argentina and Uruguay this past summer. She is also in the process of getting her Irish citizenship. Her favorite season is fall because the weather is nice and the trees look pretty.  Rocky, is the name of her dog which was named after The Rock, but she doesn’t like him very much.

She enjoys eating chocolate ice cream and her favorite subject is Spanish.

Leave a Comment

Comments are closed.

Navigate Right
Navigate Left
  • Impending Economic Crisis in Argentina

    NEWS

    12 Dead following Shooting at CA Bar

  • Impending Economic Crisis in Argentina

    NEWS

    Indonesian Plane Crash

  • Impending Economic Crisis in Argentina

    NEWS

    Migrant Caravans Approaching Southern US Border

  • Impending Economic Crisis in Argentina

    NEWS

    Powerball Winner

  • Impending Economic Crisis in Argentina

    NEWS

    Harvard Sued For Asian Admission Policies

Hang on for a minute...we're trying to find some more stories you might like.


Email This Story






For students, by students
Impending Economic Crisis in Argentina