Argentina: Pampas perils

Argentina's fiscal deficit and the current account deficit have soared to an unsustainable 10%.

When Mauricio Macri became president of Argentina in December 2015, he inherited "an economy on the brink of crisis, ravaged by one of the world's highest inflation rates", says Benedict Mander in the Financial Times. So the central bank hiked interest rates, even as the government ramped up public spending, financed by foreign investors who are willing buyers of the country's high-yielding debt.

The result is that both the fiscal deficit and the current account deficit have soared to an unsustainable 10%. Hence all eyes are now on mid-term elections in October: investors are betting that the government will perform well, giving Macri scope for reforms to "cure Argentina's economic ills".

Subscribe to MoneyWeek

Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE

Get 6 issues free
https://cdn.mos.cms.futurecdn.net/flexiimages/mw70aro6gl1676370748.jpg

Sign up to Money Morning

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Sign up

Alice grew up in Stockholm and studied at the University of the Arts London, where she gained a first-class BA in Journalism. She has written for several publications in Stockholm and London, and joined MoneyWeek in 2017.