ASSESSMENTS

In the Upcoming Presidential Election, Argentina's Business Environment Is On the Line

May 10, 2019 | 10:00 GMT

Marching demonstrators hold a banner reading "Take Macri away, leave us the dollars" during a partial strike against the economic policies of the government of Argentina's President Mauricio Macri on April 30, 2019.

Demonstrators hold a banner reading "Take Macri away, leave us the dollars" during a partial strike against the economic policies of the government of Argentina's President Mauricio Macri on April 30, 2019. Voters' displeasure over incumbent Macri's austerity program could lead to a victory for former populist President Cristina Fernandez de Kirchner in Argentina's November runoff election.

(JUAN MABROMATA/AFP/Getty Images)

Highlights

Voters' displeasure over incumbent President Mauricio Macri's austerity program could lead to a victory for former populist President Cristina Fernandez de Kirchner in Argentina's November runoff election
If elected, Fernandez would likely try to appeal to voters by reducing the burden of four years of austerity and utility price hikes on Argentine voters.
Populist policies would have damaging consequences for Argentina's business environment, such as the country expanding its fiscal deficit, possibly defaulting on foreign debt payments and scaring away foreign companies.

Less than six months before the first round of Argentine presidential voting, the future is looking uncertain for investors, bondholders and other private sector stakeholders exposed to Argentina. The main source of risk in coming years is a familiar face: Polls suggest populist former President Cristina Fernandez de Kirchner stands a good chance of being elected president in the second round of voting on Nov. 24. Such an outcome threatens to make the country's regulatory environment more challenging for the private sector while providing little relief for Argentina's financial woes....

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