The battle to stabilize Argentina’s economy rages on, just over seven months into the administration of Mauricio Macri, according to an article by The Economist. Having inherited something of a mess from the 8-year tenure of his predecessor Cristina Fernández de Kirchner, Macri had taken something of a decisive first step in addressing the runaway inflation and devaluing of the country’s currency by issuing a brand new bank note denomination. But economic recovery still seems far off, and not all of his measures are keen on gaining him much need popular support any time soon.
When Kirchner left office at the end of her second term in 2015, things were so bad that the highest-denominated Argentinian Peso bill, at 100, was worth an embarrassing 10 US dollars only, even less than one-third of its value when she was first elected in 2007. This elicited a money problem, with people forming long lines at ATMs to withdraw ever-increasing numbers of bills to pay for goods and services. As an ATM could carry only a maximum capacity of 8,000 notes, this necessitated the refilling of machines at least two times a day – and monthly maintenance – to meet the demand for peso bills.
President Macri was able to alleviate this problem by authorizing the release of a new 500-peso bill, at such a fast production speed – and with a fetching design featuring a jaguar – that the Argentinian central bank earned great accolades for their work. While armored van operators are not entirely pleased – an American-based security vehicle firm raised its revenues in the country by 60% last year – Argentinian’s see the new denomination as a savior to free them from the snaking lines and enabling them to withdraw up to 2,400 pesos per max ATM transaction ($160).
On other fields however, Macri isn’t winning smiles anytime soon. The removal of subsidies on some basic goods and services in an effort to ease pressure on the economy have only ended up worsening the inflation carried over from the Kirchner era, such that May recorded a 4.2% price increase on the national statistics office INDEC. Further figures indicate an alarming drop in economic growth, manufacturing, private employment and foreign investment: the sure signs of a recession.
Blame now falls on President Macri and his inaugural promises of quick effects from his economic policies. Economist Ramiro Castiñeira of the private consultancy Econométrica, is of the opinion that the President was too hasty with his pledges, while Macri himself believes that the public misinterpreted him into thinking that his policies will have turned the economy around by the second half of his first year in office. He is now hoping that statistical figures will level off before the year is over, lest he finds himself in the same crosshairs of criticism as former President Kirchner.
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