Argentina, The Wounded Giant Prepares For The Elections

AGI – In a tense climate, l“Argentina is preparing to go to the polls on Sunday Coming faced with a profound economic crisis that offers almost no return. It is a country that, just to give an idea, in the first six months of this year Poverty rate of 40.1%the highest level since the economy collapsed in 2001. In short, almost one in two people have below-average poverty rates.

Dramatic figures for Latin America’s third largest economy, a giant of the continent that is unable to get back on its feet. Double-digit inflation rates have been the norm in Argentina for a dozen years, but this year it has spiraled out of control, reaching 143% year-on-year, a 32-year high, as the currency continues to depreciate. The latest official data suggests that GDP fell by 2.8% in the second quarter of the year, suggesting a sharp economic slowdown.

The So the country is crumbling under the burden of debt, heir to a $44 billion loan taken out from the International Monetary Fund in 2018. The government is almost constantly negotiating a relaxation of the targets of the refinancing/support plan signed with the fund in 2022, the 22nd in the country’s history.

In order to stimulate growth after a GDP contraction of more than 6% in the last two years, the Argentine government owes private investors over 26 billion, of which 22.13 billion are related to securities subject to national legislation and 4.16 billion , which are subject to foreign legislation. In addition, there are liabilities of 3.7 billion to international financial institutions and 2.4 billion from previously restructured debt. The eighth country in the world by area (2.8 million km2), 45 million inhabitants, the country is rich in natural resources, including gas, oil and lithium. Due to its fertile soils, it is a major exporter of soybeans, wheat and corn. And let’s not forget beef, the export flagship and religion of Argentines, who are the world’s largest consumer (along with Uruguay) at 48 kg per year per person.

In this context we said: Argentines will take part in the presidential election runoff: the Peronist economics minister Sergio Massa will face the libertarian underdog Javier Milei to determine the future of a wounded, kneeling giant. Massa or Milei will replace outgoing center-left President Alberto Fernandez, who also belongs to the Peronist movement founded by former Juan Peron and his wife “Evita” and has been Argentina’s main political force for decades. The winner will take office on December 10th.

Massa enters the second round with some momentum after unexpectedly winning the first round in October when he received 37% to Milei’s 30%, shattering pollsters’ predictions. However, Milei was able to get more centrist votes after receiving the support of conservative Patricia Bullrich, who came third in the first round, receiving 6.3 million votes, or about 24%. However, not everyone will go to Milei.

Pollsters predict a close race, with some favoring Massa and others favoring Milei. The visions are different: Milei wants to dollarize the economy and reduce the size of government, Massa wants to maintain weight and try to support the job market and growth. Whatever the policy, one thing is certain: the new government will have to restart the economy, with investors and bondholders keeping an eye on the accounts, and will face a fragmented legislature divided into three parts: the Peronists, the main conservative bloc and Milei’s libertarian coalition.

Buenos Aires, Argentina

There is no time to waste: the economic growth forecasts are not very encouraging. The International Monetary Fund expects Argentina’s GDP to fall by 2.5% this year, requiring immediate efforts from the new government to reverse this trend. The same fund predicts that a rate of 2.8% will not be reached until the end of 2024.