Argentina: A Macroeconomic Face-Lift Leaves A Country Divided

The Argentina of today is radically different from the one that existed before current President Mauricio Macri took office in December 2015.

The country’s economy has recently come out of a recession, having posted year-over-year growth of 0.3% in the first quarter of 2017 after being in the negative territory for three consecutive quarters. Macri had inherited an economy which was rapidly losing ground as seen from the graph below.

The government expects the economy to grow approximately 3% in 2017 – seemingly a bit too optimistic when one considers the International Monetary Fund’s (2.2%) and the Organisation for Economic Co-operation and Development’s (2.5%) projections. Regardless of the eventual pace, the country looks set on a strong rebound after a dismal 2016, which is expected to get stronger in 2018.

Though inflation has also seen improvement, this matter is open to even more intense debate than economic growth. Inflation rate had stood at 27% when Macri took office in December 2015. It was a little higher than that by April 2017, and slowed to 24% in the following month. The improvement can be seen from the last recorded level in April 2016…