WASHINGTON, Sept 12 (NNN-AGENCIES) — Despite a history of many IMF rescue programmes, Argentina once again faces a deepening financial crisis, raising questions about whether the Washington-based lender made a mistake in its dealings with Latin America’s third largest economy.
The International Monetary Fund, which last year approved a record US$57 billion loan for Argentina in exchange for sweeping economic reforms, is in the eye of the storm after President Mauricio Macri suffered a crushing defeat in the Aug 11 primary elections.
The victory of Peronist candidate Alberto Fernandez put Macri’s re-election in serious jeopardy, and threw financial markets into turmoil, worsening the already grim economic outlook.
Macri requested a loan from the IMF in April 2018 after a run on the currency weakened the peso and worsened the ongoing financial downturn.
Despite early signs the reforms he implemented were stabilising the economy – and amid the optimistic analysis from the IMF – prices soared and job losses accelerated, sparking outrage and protests in a country with a long, fraught history with the fund.
Argentina has one of the highest inflation rates in the world at 55 per cent, while unemployment has risen to 10.1 per cent this year and a third of the population lives in poverty.
Official data show the external debt, largely denominated in US dollars, rose to 88.5 per cent of GDP in 2019 from 52.6 per cent in 2015. — NNN-AGENCIES