"Argentina on the rocky road to recession", anticipates The Economist

“Argentina on the rocky road to recession”, anticipates The Economist

Monday, July 9th 2018 - 07:08 UTC

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On a residential street corner in Buenos Aires, Van Koning Market sells imported beers to the city’s well-heeled. Since it opened in June last year costs have soared. The peso has plummeted, meaning wholesale prices have shot up. Inflation is running at 26%; the reduction of government subsidies means the monthly electricity bill has risen from 700 pesos to 4,000 pesos (US$ 142). Read full article

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Enrique Massot
Without a doubt, the economic Argentine crisis is fast approaching a dead end and opinion polls reflect the population's fears of what's to come, because beside a small group of corporations, banks and financial institutions, the majority will bear the full impact of the growing recession and an eventual default.

For those old enough, this downward slope recalls 1975's “Rodrigazo,” the end of the last military dictatorship in the earlies 1980s, the hyperinflation and recession at the end of Alfonsin's presidency in 1989, that of Menem in 1999 or that of De la Rua in 2001.

The current downward spiral has been caused by the blind application of “free market” measures at the worst possible time -- by opening the country to imports competing with local manufacturers when the world is restricting trade, by reducing or eliminating export taxes on agricultural and mining products, or authorizing huge increases on energy bills while the population's income is being eroded by the day.

It has also been caused by reckless borrowing with the only goal of keeping the lights on while eliminating barriers to speculative capitals to come and go.

Basically, what the country has had since the end of 2015 is a group of people with a polished marketing strategy and huge personal ambitions but no plan on how to steer a complex ship as Argentina.
Jul 09th, 2018 - 09:56 pm - Link - Report abuse -2
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