ASSESSMENTS

Taming the Twin Headaches of Argentina's Economy

Apr 26, 2018 | 16:54 GMT

Activists in Buenos Aires, Argentina, protest at a government news conference in June 2016 on the release of inflation figures.

Activists in Buenos Aires, Argentina, protest at a government news conference on the release of inflation figures on June 15, 2016. It was the first official release of those numbers since the inauguration of President Mauricio Macri in December 2015. Argentina had halted the release for six months, and Macri said the numbers are the first honest estimate in years.

(JUAN MABROMATA/AFP/Getty Images)

Highlights

To limit popular backlash, Argentine President Mauricio Macri has adopted a gradual approach to economic reform and trade liberalization, but it has generated weak results.
While the economy recovered last year from a deep recession, a growing trade deficit and high inflation could put those improvements at risk ahead of Argentina's 2019 presidential election.
Macri's chances for re-election could be severely undermined if his reforms don't start generating more visible economic results.

In Argentina, the political pendulum swings between economic reform and state intervention. Since taking office in December 2015, President Mauricio Macri has enacted numerous economic improvements and trade liberalizations to ease inflation and improve growth. However, those changes may not be enough, and his time is running short. The next presidential election will be in November 2019, and the reduced but still high inflation, along with a trade deficit, could pinch voters and lead to a populist backlash, bringing the return of greater government restrictions and regulations....

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